Consider the following scenario: The price for cable in your neighborhood has risen from $24 to $30 per month, and the quantity demanded decreases from 204,000 to 196,000 subscribers. a. Calculate the percentage change in the price of cable. b. Calculate the percentage change in the quantity demanded by subscribers. c. Based on these calculations, is the demand for cable elastic or inelastic? d. What is the change in revenue for the cable service providers? e. Now explain why the concept of price elasticity of demand is useful. 2. In the final paragraph of your paper, answer the following questions: a. What is the formula for measuring the price elasticity of supply? (See page 98 of your textbook depending in the edition) b. If the price of avocados goes up from $15 a dozen to $20 a dozen, and Garman’s Farms supplies 1,200 dozen instead of 1,000 dozen: i. What is the price elasticity for Garman’s supply? ii. Is its supply elastic or inelastic? How do you know? 3. USE THE MIDPOINT APPROACH TO COMPLETE THE CALCULATIONS FOR BOTH PROBLEMS AND SHOW ALL CALCULATIONS.

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