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3 years ago

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Suppose the price for an Lyft ride in Austin, TX decreases from $15 to $12 causing the quantity of rides demanded to increase fr

om 1000 to 1600. Using the midpoint method, the price elasticity of demand for an Lyft ride is ________.

1 answer:

Inessa [10]3 years ago

8 0

Answer:

Midpoint value of price elasticity of demand = -2.07

Explanation:

We know,

Midpoint value of price elasticity = $\frac{(Q_{2} - Q_{1})/[(Q_{2} + Q_{1})/2] }{(P_{2} - P_{1})/[(P_{2} + P_{1})/2] }$

Given,

Original Price, $P_{1}$ = $15

New Price, $P_{2}$ = $12

Original Quantity demanded, $Q_{1}$ = 1,000 units

New Quantity demanded, $Q_{2}$ = 1,600 units

Putting the value in the above midpoint formula, we can get

Midpoint value of price elasticity = $\frac{(1,600 - 1,000)/[(1,600 + 1,000)/2]}{(12-15)/[(12+15)/2]}$

Midpoint value of price elasticity = $\frac{600/1,300}{-3/13.5}$

Midpoint value of price elasticity = $\frac{0.46}{-0.22}$

Midpoint value of price elasticity of demand = -2.07

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Answer:

B) reach.

Explanation:

Sine the marketing campaign will only last 45 days, it will be very short, and the potential audience is very large. Also during Holiday season a lot of campaigns are launched, so EA's campaign will have competition. So the ad agency must be very concerned with reaching a high percentage of their target audience. They want to produce a high market share and in order to do so, they must reach a lot of people.

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3 years ago

Assume that the risk-free rate of interest is 3% and the expected rate of return on the market is 15%. I am buying a firm with a

kondor19780726 [428]

Answer:

The correct solution is "$6,564.01". A further solution is given below.

Explanation:

The given values are:

beta,

= 1.6

market return,

= 15%

cash flow,

= $2,000

risk free rate of interest,

= 3%

Now,

The stock return will be:

= $3+ 1.6\times (15-3)$

= $3+ 1.6\times 12$

= $22.2 \ percent$

The actual worth of the firm will be:

= $\frac{cash \ flow}{rate \ of \ return}$

= $\frac{2000}{22.2 \ percent}$

= $\frac{2000}{0.222}$

= $9,009$

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= $3+ 0.8\times (15-3)$

= $3+ 0.8\times 12$

= $12.6 \ percent$

So that I'm paying for the firm,

= $\frac{2000}{12.6 \ percent}$

= $\frac{2000}{0.126}$

= $15,573.01$ ($)

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= $15,573.01-9,009$

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3 years ago

In Opulencia, the marginal propensity to save is only 0.10. In an effort to promote the virtues of saving, the government starts

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Answer:

A greater saving will reduce the impact of the multiplier.

Explanation:

A multiplier generally refers to the factor that amplifies or increase the initial change of something else.

In economics, multiplier refers how change in spending or saving results into a larger change in local output and income.

Since addition of marginal propensity to consume (MPC) and marginal propensity to save (MPS) is equal to 1, the formula for calculating a multiplier can be stated as:

Multiplier = 1/(1 - MPC) or 1/MPS

From the question therefore, when MPS = 0.10, we have:

Multiplier = 1/0.10 = 10

When MPS is increases to 0.20, we have:

Multiplier = 1/0.20 = 5

Since 5 is less than 10, a greater saving will therefore reduce the impact of the multiplier.

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