Question 1. Own Price elasticity or cross-price elasticity. Given a table of the price(s) and quantities before the price rises, how do you compute the POINT (or ARC) elasticity of demand of a good as its price rises.
PLEASE SHOW FORMULA AND WORK
Solve this problem for each one of these forms:
-Own-Price elasticity by point method
-Own-Price elasticity by arc method
-Cross-Price elasticity by point method
-Cross-Price elasticity by arc method
For own-price elasticity, state whether the demand for this good is elastic or inelastic.
For cross-price elasticity, state whether the goods are substitutes or complements.
Question 2. A table like the one below is given, plus a wage and a cost of capital. The problem is to fill in the BLANKS. Put formulas in the cells above the variable names. Do not enter formulas in cells with "///" in them.
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Formulas
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None
///
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Given
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L
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TVC
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Q
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MPL
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APL
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AVC
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TFC
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TC
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ATC
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MC
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0
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0
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1
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3
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2
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6
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