Lê Minh Thư – Nhóm 3

ASSIGNMENT TOPIC 3
EX 1
a, P1 =20$ P2=40$
Q1=1 Q2=3

% Q =(3-1)/1=2
When the restaurant, introduced a voucher system giving patrons two meals for
the price of one, the Binh’s dined out three times a month,so Binh must pay 40 $
or 2 meals.

% P =(40-20)/20=1
So, elasticity of demand for this restaurant is E = % Q/% P=2
b,
When the promotional vouchers, the Binh’s monthly expenditure on meals at this
restaurant increase. Although he ate three times a month, he pay two meals.
The change is in total expenditure consistent with the value of demand you calculate.
E >1 , P disincrease, TR increase
EX 2
2.1. College Enrollment and Apartment Prices
a, $

400 a

Initial demand
100 (10 apartments)
The initial demand equation: P= a-b.Qd
Since Ep= Q’p. (P/Q)
 Ep= (a-b.Qd)’. P/Q  Ep= -b.P/Q
 b= P/(Q.Ep)
 b= 400/(1000.1) = 0.4
P= a-b.Qd 400= a-0.4x1000  a= 800
The demand equation: P= 800 – 0.4.Qd

b, Percentage change in equilibrium price=15%/(1+0,5)=10%

($) Initial new demand

410 demand b supply
400 a

100 110 115 (10

apartments)
c, Percentage change in equilibrium price=15%/(1+0,5)=10%
15% increase the demand for apartments will increase the equilibrium prices for
apartments by 10%
2.2 Regulations and Price of Housing
Percentage change in equilibrium price =-(-12%)/(1+3)=3 %
12% reduction in supply increases the equilibrium price by 3%
New supply
(1000 đôla)
206 b initial supply
200 a

demand

88 97 100
2.3 Import Restrictions and the Price of Steel
Percentage change in equilibrium price= -(-24%)/(2,3+0,1)=6%
24 % reduction in supply of steel increases the equilibrium price by 6%

New supply
106 b initial supply
100 a

demand

76 94 100