Answer:
$0.35
Explanation:
The computation of the price elasticity of demand using mid point formula is shown below:
= (change in quantity demanded ÷ average of quantity demanded) ÷ (percentage change in price ÷ average of price)
So, Change in quantity demanded would be
= Q2 - Q1
= 40 - 30
= 10
Now, Average of quantity demanded
= (40 + 30) ÷ 2
= 35
Change in price
= P2 - P1
= $35 - $15
= $20
And, the average of price would be
= ($35 + $15) ÷ 2
= $25
Cross price elasticity of demand = (10 ÷ 35) ÷ ($20 ÷ $25)
= 0.28 ÷ $0.8
= $0.35
Explanation:
1. The ceterus paribus effect gives us to what extent, the effect of a variable has on another variable, while holding all other factors fixed. Analysing job training of workers on productivity will give us results that are not biased since we will not be taking account of other factor variables in the calculations. When 2 firms are the same in almost every aspect apart from number of hours on training, then we will find out that each firm would have different levels of workers output. So we should know if workers output increases due to job training.
2. When it comes to provision of training, furms do these based on characteristics of the workers. Some of these characteristics are measurable while some are immeasurable
Measurable:
Experience on the job,
Productivity
Level of education,
immeasurable :
Skill set
Vision
Likeliness to bstay at firm
3. Apart from worker characteristics, productivity also depends on other factors one of which is technological change. A technological change can bring about increased efficiency and greater output by the worker. Different firms using different capital and technological combination are quite likely to have different output levels.
4. A positive correlation between job training and productivity cannot be used to ascertain if job training makes worker more efficient this is due to the fact that correlation only tells us if variables are in coexistence. So a positive correlation does not tell us that job training is indeed bringing about changes in the productivity of workers.
Solution :
According to the theory of demand and supply, the equilibrium price and the quantity is established where both the demand and supply curves intersect.
From the graph, we can see that the point of equilibrium is at the intersection of D and S.
At this point, mathematically, D = S. In order to determine the price and quantity which exists at this point, we need to equate the demand as well as supply functions to calculate the equilibrium values.
∵ D is equal to S, we have
Now substituting this value of the equilibrium price in to any of the functions, we get the equilibrium quantity at this price.
This is the equilibrium quantity. At this point, equilibrium price as well as the quantity is the same. Let the price of the golf club increases from $120 to $140. So substituting the value to the function above to determine the new quantity.
= 100
Therefore, when the demanded quantity decreases from 120 thousand clubs to 100 thousand clubs. This increases the price and decreases the quantity as the supply curve moved to the left. The demand remains constant.
