The Rangeland Journal

Running head: MICROECONOMICS
MICROECONOMICS
Name of Student:
Name of University:
Author Note:

MICROECONOMICS1
Table of Contents
Answer to Question: 1.....................................................................................................................2
Answer to Part (a)........................................................................................................................2
Answer to Part (b)........................................................................................................................2
Answer to Part (c)........................................................................................................................3
Answer to Part (d)........................................................................................................................4
Answer to Part (e)........................................................................................................................4
Answer to Question: 2.....................................................................................................................7
Answer to Part (a)........................................................................................................................7
Answer to Part (b)........................................................................................................................8
Answer to Part (c)........................................................................................................................9
Reference List................................................................................................................................11

MICROECONOMICS2
Answer to Question: 1
Answer to Part (a)
Table 1: change in revenue with respect to change in price for computer chips
Source: (As created by the author)
When price changes from $400 per chip to $350 per chip and from $350 to $300 per chip,
the revenue value changes from $12250 to $10500 and from $12000 to $10500.
Change in total revenue keeping same demand quantity and price for the rest of the parameters
=$(57,500-54,250) =$3,250
Thus, when the price is lowered, total revenue goes down by $3250, as shown in table1.
Answer to Part (b)

MICROECONOMICS3
Table 2: Elasticity at average price $300
Source: (As created by the author)
At an average price $300, the value of elasticity is -0.75. The negative value denotes the
negative relationship between price and quantity demanded. As the value is less than 1, price
elasticity of demand is inelastic (Norman and Wills 2017).
The total revenue test is used to test the elasticity of demand. When a price rise causes a
fall in total revenue and vice versa, then demand is elastic. Whereas, if rise in price leads to an
increase in total revenue then demand is elastic. In this case, the total revenue has fallen with fall
in price means that price elasticity of demand is inelastic.
Answer to Part (c)
Table 3: Elasticity of beef
Table 4: Calculation for elasticity