micro assignmet

1. Answer all of the following questions in Microsoft Word file with complete questions and answers and attach it. Correct answer to each question is worth up to 20 points.

1. For each of the following absolute values of price elasticity of demand, indicate whether demand is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. In addition, determine what would happen to total revenue if a firm raised its price in each elasticity range identified. 

           a.    ED =  2.5 

           b.    ED = 1.0 

           c.     ED =  ∞ 

           d.    ED = 0.8

2. Calculate the price elasticity of supply for each of the following combinations of price and quantity supplied. In each case, determine whether supply is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic in each case. 

           a.    Price falls from $2.25 to $1.75; quantity supplied falls from 600 units to 400 units. 

           b.    Price falls from $2.25 to $1.75; quantity supplied falls from 600 units to 500 units. 

           c.     Price falls from $2.25 to $1.75; quantity supplied remains at 600 units.  

           d.    Price increases from $1.75 to $2.25; quantity supplied increases from 466.67 units to 600 units.