Question

Please help me answer these questions for my economics class!!
1. the graph is shown please just tell me the supply and demand and where they go
2. is the demand curve shallow or steep? what does this mean about the elasticity of the demand for memberships?
3.is the supply curve shallow or steep? what does this mean about the elasticity og supply for members?

Answer 1

Answer:

I am pretty sure that the one above isn't right, but when I get mine graded I will come back and update this. But the answers are below.

Explanation:

The graphs will be below, and the labeling for the second graph was put below it.

2. Is the demand curve shallow or steep?  What does this mean about the elasticity of the demand for memberships? (5 points)

The demand curve is shallow, which means the elasticity of the demand for memberships is inelastic

3. Is the supply curve shallow or steep?  What does this mean about the elasticity of supply for memberships? (5 points)

The supply curve is steep, which means the elasticity of supply for memberships is elastic.

Answers for written part 2:

2. Based upon the graph you created, what price should Bond's Gym charge for memberships in order to reach equilibrium? (5 points)

They should charge about 35$-40$ per membership to achive supply and demand equilibrium.

3. If Bond's Gym raises prices to your recommended price, how will this affect demand for their product? (5 points)  

The demand will decrease with the raising of prices, but will stay high enough in demand that it will still be at an advantageous position.

Answer 2

Based on the information given, it can be seen that the demand curve is shallow.

It should be noted that the demand curve being shallow implies that the elasticity of demand for the membership is elastic. This means that the absolute value is greater than 1. Hence, quantity changes faster than price.

Also, the supply curve is steep and this implies that the elasticity of supply is elastic. In order to achieve equilibrium, the price that should be charged will be $35 - $40.

Lastly, when the price is raised, the demand will reduce. This illustrates the law of demand that a higher price reduces demand.

Learn more about demand on:

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