Elasticity of Demand and Consumer Surplus

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Assignment:

In this ordinance, you allure compute the Attack Elasticity of Demand, interpret a fixed intelligence of assimilater valuables established on dissenting final utilities, assimilater balance, and how the buying valuable and quantity of assimilater balance transmutes established on divergent pricing schemes.

In this ordinance, you allure be assessed on the subjoined outcome:

BU224-5: Examine how the concept of advantage affects purchasing decisions by living-souls and assimilater balance.

Questions

1. The related board semblances the attack and monthly insist for barrels of gosum berries in Gondwanaland.

Price of gosum berries per barrelNative Insist for gosum berries per month
$1000
$90100
$80200
$70300
$60400
$50500
$40600
$30700
$20800
$10900
$01000

a. Using the midpoint rule (semblance your production), compute the attack elasticity of insist when the attack of a barrel of gosum berries rises from $10 to $20. What husk of elasticity is this appreciate that you computed for the attack elasticity of insist and what does it balance for how insist allure transmute established on a transmute in attack after a whilein this attack stroll? (10 points)

b. Using the midpoint rule (semblance your production), compute the attack elasticity of insist when the attack of a barrel of gosum berries rises from $70 to $80. What husk of elasticity is this appreciate that you computed for the attack elasticity of insist and what does it balance for how insist allure transmute established on a transmute in attack after a whilein this attack stroll? (10 points)

c. Notice that the estimates from (a) and (b) overhead are divergent. Why do attack elasticity of insist estimates transmute parallel the insist flexion? (10 points)

2. Matilda is downloading still n ess and videos from an online top. She is exotericly buying three still n ess downloads that assimitardy $3 each and two video downloads that besides assimitardy $3 each. The board adown indicates what she reports as the final advantage of the developed still n ess download and of the developed video download in this union of purchases.

QuantityPrice per DownloadMU per download
Music downloads3$360
Video downloads2$345

As an ordinance for her Microeconomics mode, Matilda used the final utilities that she gave to her 3rd still n ess download and her 2nd video download to sum the Experiment Tally Sheet adown. Her conducive budget was $19.00.

Downloads ofmu (score) from 1 to 100Price of each $3.00Money elapsed onDownloads ofmu (score) from 1 to 100Price of each $3.00Money elapsed onTotal MoneyTotal Budget
musicmumu/$musicvideosmumu/$videosSpentRemaining
1st??$3.001st??$3.00$6.00$13.00
2nd??2nd4515$3.00$12.00$7.00
3rd6020$3.003rd$15.00$4.00
4th4th

Total coin elapsed on still n ess: $9.00

Total coin elapsed on videos: $6.00

Total coin elapsed: $15.00

Total budget remaining: $4.00

a. A assimilater maximizes advantage when the developed dollar elapsed on any amiable-tempered-tempered generates the selfselfsame contentment as the developed dollar elapsed on perfect other amiable-tempered. Is Matilda maximizing her advantage? Interpret your reply. (3 points)

b. Should Matilda assimitardy one further video download, to stir her closer to her optimum advantage? Interpret your reply. (3 points)

c. Should Matilda assimitardy one close still n ess download and one further video download, to stir her closer to her optimum advantage? Interpret your reply. (3 points)

d. Should Matilda assimitardy one further still n ess download, to stir her closer to her optimum advantage? Interpret your reply. (3 points)

3. Brandon and his nativity frequently divulsion movies from the new internet movie streaming advantage, Xanadu. The board adown semblances Brandon’s insist register for prospect movie divulsionals that Brandon’s nativity is careful in watching.

Number of internet movie divulsionalsWillingness to pay each divulsional
1st$7
2nd$6
3rd$5
4th$4
5th$3
6th$2
7th$1
8th$0

a. If the attack of each movie divulsional from Xanadu is $3, how multifarious movie divulsionals allure Brandon buy and how abundantly assimilater balance does Brandon accept? Interpret your reply. (5 points)

b. If the attack of each movie divulsional from Xanadu is $5, how multifarious movie divulsionals allure Brandon buy and how abundantly assimilater balance does Brandon accept? Interpret your reply. (5 points)

c. If the Xanadu online advantage offers as multifarious movie divulsionals as the customer wants to download, all for a one-age fee of $25.00, how multifarious movie divulsionals allure Brandon download and how abundantly assimilater balance allure Brandon accept? Interpret your reply. (5 points)

d. If the Xanadu online advantage offers as multifarious movie divulsionals as the customer wants to download, all for a one-age fee of $35.00, how multifarious movie divulsionals allure Brandon download and how abundantly assimilater balance allure Brandon accept? Interpret your reply. (5 points)

e. If the Xanadu’s market investigation semblanceed that Brandon’s insist represented what most of Xanadu’s customers wanted, what would be the most that Xanadu could attack as a one-age fee for all the downloads that the customer wanted? (4 points)

4. Newsdisquisition vending implements are planned so that once you possess paid for one disquisition; you possess bearing to all the disquisitions in the implement and could accept multiple disquisitions at a age. However, other vending implements dispense singly one part (the part you bought). You do not possess bearing to all the amiable-tempereds (sodas, candy, snacks, etc.) at one age. Using the concept of final advantage, interpret why these vending implements dissent? (6 points)

--------------------------------------------

References:

Directions for Submitting your Assignment

Be assured to rejoin to all the inquirys and acquiesce your disquisition to the Unit 5 Ordinance Dropbox by Tuesday, midnight ET of this part.

Unit 5 Assignment: Elasticity of Insist and Consumer SurplusPossible PointsPoints Earned
Overall Writing:8
Used punish polish indicate in uploading ordinance muniment.1
Demonstrated concerted trial to localize symbolical from the textbook and/or seminars to reply inquirys.3
Correctly formatted disquisition in exoteric APA title. Includes in-text citations and rolled at last one regard.3
Used plummet English after a while few or no real errors.1
Individual Questions:64
1.a. Correctly computed attack elasticity of insist ($10-$20), and entirely interpreted the balanceing of the appreciate computed.10
1.b. Correctly computed attack elasticity of insist ($70-$80), and entirely interpreted the balanceing of the appreciate computed.10
1.c. Correctly interpreted why these Dpe estimates transmuted at divergent attacks?10
2.a. Correctly unshaken and interpreted if advantage was maximized at the 3rd still n ess and 2nd video.3
2.b. Correctly unshaken and interpreted if advantage was maximized at the 3rd still n ess and 3rd video.3
2.c. Correctly unshaken and interpreted if advantage was maximized at the 2nd still n ess and 3rd video.3
2.d. Correctly unshaken and interpreted if advantage was maximized at the 4th still n ess and 2nd video.3
3.a. Correctly computed Brandon's sum movie divulsionals and Consumer Balance at $3/rental.5
3.b. Correctly computed Brandon's sum movie divulsionals and Consumer Balance at $5/rental.5
3.c. Correctly computed Brandon's sum movie divulsionals and Consumer Balance at a one-age $25 fee.5
3.d. Correctly computed Brandon's sum movie divulsionals and Consumer Balance at a one-age $35 fee.5
3.e. Correctly unshaken Xanadu's zenith one-age fee.4
4. Correctly interpreted how Final Advantage determines how newsdisquisition and snack vending implements dissent.6
Less points deducted for tardy submission  
Total Points80

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