1.) Given the following demand curve
Q=100 - 2P
determine the price elasticity of demand at the following prices.
1. P = 10
Elasticity =
2. P = 30
Elasticity =
2.)TLC Lawn Care, Inc. provides fertilizer and weed control services to residential customers. Its seasonal services package, regularly priced at $250, includes several chemical spray treatments. As part of an effort to expand its customer base, TLC offered $50 off its regular price to customers in Lahania area. Customer response was enthusiastic, with sales rising to 5,750 units from the 3,250 units sold in the same period the previous month
1. Calculate price elasticity of demand for TLC service. p =?
2. Calculate the standard error of estimate and the standard error of Coefficient
Standard error of estimate =
Standard error of Coefficient =
3. Make a prediction of Y when X = 64. Prediction y=
4. Calculate a 95% prediction interval when X = 64.
3.) Predicted value of y will lie between the (lower value) and (higher value)
1. Compute the coefficient of determination.
Coefficient of determination =
4.)Deluxe Carpeting a leading manugacturer of carpeting sold 28 million square yards of carpeting at a price of $16 per yard. This year, GNP per captia is expected to fall from $19,000 to $17,000 as the nation enters a recession. Deluxe expects that current-year sales to fall to 20 million square yards.
a. Calculate the implied arc income elasticity of demand. I =
b. Given a price elasticity coefficient of -2.5, to what level would price have to be lowered to maintain there sales at a level of 28 million square yards.
New Price =
5.)During the past year, the average price of lots along Lake Michigan in Carol Beach rose from $2,500 to $3,000 per foot of lake front. At the same time, sales of new homes located off the Lake rose from 40 to 70 units.
a. Calculate the cross elasticity of demand. EC=
b. Are lake front lots and new home lots off the lake compliments or substitutes. Type in either substitutes or compliments.
6.)Suppose the Indiana Power Company wishes to maximize profits. The cost, demand and revenue functions have been determined and given below. Determine Indiana Power profit maximizing price, output and level of profits.
Q = output level
P = Price
TC = Total Cost = 20 + 5Q + Q2
P = 25 Q Demand Function
P=
Q =
Profit =
The second derivative =
Since the second derivative is (enter positive or negative) we have a (enter maximum or minimum) .