If the price elasticity of demand for a product is -2.5, then a price cut from $2.00 to $1.80 will _________ the quantity demand
1 answer:
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Answer:
hello your question is incomplete attached below is the complete question
A ) $7.766
B ) 4350 workers
C ) 61777.20
D ) $33782.10
Explanation:
A) Real wage = 4 *
where ; K = 120000, L = 7000
hence Real wage = 7.06 before 10% increase
After 10% increase ; Real wage = 7.06 + (7.06 * 0.1 ) = $7.766
B) employment ( L )
=
= 4350 workers
C) Output
Y = 5 ( 120000 )^0.2 * (7000)^0.8
= 61777.20
D) Total amount earned by workers
L * W = 4350 * 7.766
= $33782.10
