1)A plastic surgeon thinks she can make more revenue by lowering the price of cosmetic surgery. She lowers her hourly rate from $600 to $550. If cosmetic surgery is an elastic service, is she correct in her assumption?
A)Yes
B)No
2)How would the elasticity of supply relate to the extremely high prices for paintings produced by painters from centuries before now.
Answer:
1) Yes(not sure)
2) I need help with this.
Thank You!!!
If it is elastic, then demand will increase at the lower price.
b. For those old paintings, supply cannot increase, the painter is kuput. The supply is inelastic.
1) To determine if the plastic surgeon is correct in assuming that lowering the price of cosmetic surgery will result in higher revenue, we need to consider the concept of price elasticity of demand. Price elasticity of demand measures the responsiveness of demand for a product to changes in its price.
If a service is considered to be elastic, it means that a change in price will have a proportionally larger effect on the quantity demanded. In other words, if the price is lowered, the demand for the service will increase by a greater percentage.
To determine the price elasticity of demand for cosmetic surgery, the plastic surgeon would need to analyze historical data to see how the quantity demanded has changed in response to price changes. If the demand for cosmetic surgery has been shown to be highly sensitive to price changes (i.e., a small decrease in price results in a significant increase in demand), then the plastic surgeon's assumption might be correct. However, without specific data on the elasticity of demand for cosmetic surgery, it is difficult to definitively answer the question.
2) The elasticity of supply is a measure of the responsiveness of the quantity supplied of a product to changes in its price. In the context of extremely high prices for paintings produced by painters from centuries before now, the elasticity of supply would depend on various factors.
Typically, the supply of paintings from centuries ago is limited because these artworks are considered rare and unique historical artifacts. The scarcity of these paintings can lead to a relatively inelastic supply. Inelastic supply means that even if the price of these paintings increases significantly, the quantity supplied would not change much.
The limited supply of paintings from centuries ago, combined with their historical significance and cultural value, often leads to high prices in the art market. Collectors, museums, and art enthusiasts are willing to pay large sums of money to acquire these paintings, regardless of price.
It's important to note that the elasticity of supply can vary within different segments of the art market. For contemporary artwork or reproductions, the supply might be more elastic, meaning that artists or producers can increase their production to meet higher demand as prices rise.
Overall, the extremely high prices for paintings produced by painters from centuries ago can be attributed to a combination of limited supply, their historical significance, cultural value, and the willingness of buyers to pay high amounts for these unique artworks.