Working a composite gym's fee increase by the midpoint method, this BU224 Unit 3 elasticity problem set computes price, cross-price and income elasticities and reads each for the owner. Searches like "bu 224 unit 3 assignment example", "bu224 unit 3 sample" and "bu224 unit 3 example" land here.
What a finished BU224 Unit 3 elasticity problem set looks like
Five numbered problems across about three pages, each laid out as given, formula, work, answer and meaning. Problem one raises the monthly fee from 30 to 36 dollars while membership falls from 1,200 to 1,020. By the midpoint method the quantity change is 16.2 percent and the price change 18.2 percent, an elasticity of about 0.89 in absolute value, so demand is inelastic. Problem two confirms it with the revenue test: 36,000 dollars a month becomes 36,720. Problem three finds a cross-price elasticity near 0.2 when a climbing gym cuts its day pass, marking the two as weak substitutes. Problem four computes an income elasticity of 1.25. The last problem tries a further rise to 42 dollars and shows demand turning elastic there, with revenue falling to 35,280.
How a BU224 Unit 3 example is structured
Every problem follows the same five-part layout, so a grader finds the formula, the substitution and the result in the same place each time. The midpoint method is named in problem one and used throughout, with one sentence on why it gives the same answer whichever direction the price moves. Percent changes are shown before they are divided, so an arithmetic slip is visible at the step where it happened. Each answer keeps its sign where the sign carries meaning, positive for substitutes, and drops it where convention does, for own-price elasticity. The meaning line runs one or two sentences and always addresses the gym's decision rather than restating the classification. Problem five is deliberately the hardest, because it asks whether an elasticity measured at one price holds at another, and the answer is no.
The fee increase
From 30 to 36 dollars, and from 1,200 members to 1,020. Midpoint percent changes of 16.2 and 18.2 give an elasticity of about 0.89.
The revenue test
Monthly revenue rises from 36,000 to 36,720 dollars, the check that agrees with an inelastic reading and would have flagged an error if it had not.
A rival's day pass
A climbing gym cuts its pass price and membership dips slightly. A cross-price elasticity near 0.2 marks the two as weak substitutes.
Local incomes rise
An 8 percent rise in household income brings a 10 percent rise in memberships, an income elasticity of 1.25 and a normal good.
One more increase
At 42 dollars the same demand turns elastic, around 1.26, and revenue drops to 35,280, showing elasticity changing along a straight-line curve.
Where marks go in BU224 Unit 3
The largest deductions in Unit 3 go to percent changes computed from shifting bases, the starting value in one problem and the ending value in the next, which makes answers inconsistent even when each looks plausible. Close behind is a correct number classified the wrong way, calling 0.89 elastic because it sits near one. Many rubrics deduct when the revenue test is skipped, or contradicts the classification without comment. Dropping the sign on a cross-price elasticity erases the difference between substitutes and complements, which is the whole finding of that problem. Answers without a meaning line tend to earn partial credit at best, since the unit is about predicting how buyers respond. A last loss comes from assuming one elasticity holds at every price, the error problem five is built to expose.
Get a BU224 Unit 3 example written to your instructions
Five-part layouts like the one above are what comes back: given, formula, work, answer and meaning for every problem on your Unit 3 set. Upload the set with its rubric and any method instructions, midpoint or otherwise, and flag any problem your instructor has already demonstrated. Turnaround is 24-48h, and a first custom sample carries no fee.
BU224 Unit 3 questions, answered
Why does my textbook use the midpoint method?
Because a percent change depends on its base. Going from 30 to 36 is a 20 percent rise, but going from 36 to 30 is a 16.7 percent fall, so a simple formula gives different elasticities for the same stretch of curve. The midpoint method divides by the average of the two values, which gives one answer whichever direction you travel.
Should elasticity be reported as negative?
For own-price elasticity, many texts drop the sign and report the absolute value, since demand almost always slopes downward. For cross-price and income elasticities, the sign is the finding: it tells you whether goods are substitutes or complements, normal or inferior. Follow your text's convention and keep it consistent across the whole set.
What if my answer is right but the explanation is short?
Short is fine if it says what the number means for the decision in the problem. A single sentence noting that a price rise will increase revenue because buyers respond weakly earns the interpretation credit. A sentence that only restates the classification, demand is inelastic, usually does not, because it adds nothing the number had not already said.