An electric device delivers a current of [tex]$15.0 A$[/tex] for 30 seconds. How many electrons flow through it?
Answer (2)
The electric device with a current of 15.0 A for 30 seconds delivers approximately 2.81 × 1 0 21 electrons. This is calculated by first determining the total charge using Q = I × t and then dividing that charge by the charge of a single electron. Therefore, a significant number of electrons flow through the device in that time frame.
;
Calculate price elasticity of demand (Ed) for each product using the formula: E d = % change in price % change in quantity demanded .
Milk: E d = − 5 , Ghee: E d = − 6 , Curd: E d = − 0.233 , Paneer: E d = − 0.25 .
Revise prices for 2018: Decrease prices for Milk and Ghee (elastic demand) and increase prices for Curd and Paneer (inelastic demand) to increase total revenue.
Price elasticity is useful in price discrimination and pricing of inputs.
Milk: -5, Ghee: -6, Curd: -0.233, Paneer: -0.25
Explanation
Problem Analysis We are given the prices and demands for milk, ghee, curd, and paneer in 2016 and 2017. We need to calculate the price elasticity of demand for each of these products, suggest price revisions for 2018 to increase total revenue, and explain the usefulness of price elasticity of demand in price discrimination and pricing of inputs.
Formula for Price Elasticity of Demand The price elasticity of demand (Ed) is calculated using the formula: E d = % change in price % change in quantity demanded = P 1 P 2 − P 1 Q 1 Q 2 − Q 1 where P 1 and Q 1 are the price and quantity in 2016, and P 2 and Q 2 are the price and quantity in 2017.
Calculating Elasticity for Milk For Milk: P 1 = 50 , Q 1 = 400000 , P 2 = 45 , Q 2 = 600000 E d M i l k = 50 45 − 50 400000 600000 − 400000 = 50 − 5 400000 200000 = − 0.1 0.5 = − 5
Calculating Elasticity for Ghee For Ghee: P 1 = 300 , Q 1 = 40000 , P 2 = 280 , Q 2 = 56000 E d G h ee = 300 280 − 300 40000 56000 − 40000 = 300 − 20 40000 16000 = − 0.0667 0.4 = − 6
Calculating Elasticity for Curd For Curd: P 1 = 70 , Q 1 = 100000 , P 2 = 100 , Q 2 = 90000 E d C u r d = 70 100 − 70 100000 90000 − 100000 = 70 30 100000 − 10000 = 0.4286 − 0.1 = − 0.233
Calculating Elasticity for Paneer For Paneer: P 1 = 150 , Q 1 = 2000 , P 2 = 180 , Q 2 = 1900 E d P an eer = 150 180 − 150 2000 1900 − 2000 = 150 30 2000 − 100 = 0.2 − 0.05 = − 0.25
Price Revision Strategy Based on the calculated price elasticity of demand, we can revise prices for 2018 to increase total revenue. If |Ed| > 1 (elastic demand), decrease the price to increase total revenue. If |Ed| < 1 (inelastic demand), increase the price to increase total revenue.
Price Revision for Each Product Milk: Ed = -5 (Elastic). Decrease the price to increase total revenue. Ghee: Ed = -6 (Elastic). Decrease the price to increase total revenue. Curd: Ed = -0.233 (Inelastic). Increase the price to increase total revenue. Paneer: Ed = -0.25 (Inelastic). Increase the price to increase total revenue.
Usefulness of Price Elasticity of Demand Price elasticity helps in identifying different consumer segments with varying price sensitivities, which allows firms to charge different prices to different segments to maximize profits. This is known as price discrimination. For example, a company might offer student discounts because students typically have a more elastic demand.
Price elasticity of demand for the final product influences the demand for inputs. If the final product has inelastic demand, the demand for inputs will also be relatively inelastic, giving input suppliers more pricing power. For instance, if bread has inelastic demand, the demand for wheat will also be relatively inelastic.
Final Answer The price elasticities of demand are: Milk (-5), Ghee (-6), Curd (-0.233), and Paneer (-0.25). To increase total revenue: decrease the price of Milk and Ghee, and increase the price of Curd and Paneer. Price elasticity is useful in price discrimination and pricing of inputs.
Examples
Consider a concert venue deciding on ticket prices. By understanding the price elasticity of demand, they can optimize revenue. If demand is elastic (e.g., for a less popular band), lowering prices can significantly increase attendance and overall revenue. Conversely, if demand is inelastic (e.g., for a very popular artist), they can raise prices without significantly reducing attendance, thereby increasing revenue. This principle extends to various scenarios, from airline ticket pricing to grocery store promotions, helping businesses make informed decisions to maximize their financial outcomes.
