Asked by
Deborah Gonzalez
on Dec 01, 2024
Verified
The demand function for small business computers in the United States is given by x = 200 - 10p, where x is annual sales measured in thousands of computers and p is the price of a computer measured in thousands of dollars.Japanese firms supply a big share of these computers.They measure prices in yen where 150 yen equal 1 dollar.The price of 1 computer is $10,000.Let Eu be the price elasticity of demand at this price as calculated by US firms who measure in dollars, and let Ej be the price elasticity of demand at the same $10,000 price but measured in yen by the Japanese firms.Which of the following are the values of Eu and Ej, respectively?
A) -1, 2150
B) -1, 21
C) -2, 22
D) -2, 2300
E) -2, 20.0133
Demand Function
A mathematical function showing the quantity of a good demanded at different prices.
Price Elasticity
Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price.
Yen
The official currency of Japan, known internationally by its symbol ¥.
- Determine and interpret the elasticity of demand in relation to price for various products.
- Calculate the effects of market changes on demand using elasticity equations.
Verified Answer
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Learning Objectives
- Determine and interpret the elasticity of demand in relation to price for various products.
- Calculate the effects of market changes on demand using elasticity equations.