Respuesta :
Answer:
The correct answer is option d.
Explanation:
The price elasticity of demand for apples will be
= [tex]\frac{change\ in\ quantity\ demanded}{change\ in\ price}[/tex]
= [tex]\frac{\frac{Q2-Q1}{Q1} }{\frac{P2-P1}{P1} }[/tex]
= [tex]\frac{\frac{80-70}{70} }{\frac{20-30}{30} }[/tex]
= [tex]\frac{\frac{10}{70} }{\frac{-10}{30} }[/tex]
= -0.43
The elasticity of demand is less than 1, this indicates that the demand is inelastic.
Answer:
d. 0.43, inelastic
Explanation:
The price elasticity of demand measures how the quantity demanded of a good or service responds to change in price of that good or service.
The formula is:
PED= % change in quantity demanded/ % change in price
For this problem:
%Change in quantity demanded= (q2-q1/q1) = (80-70)/70= 1/7
%Change in price = ( p2-p1/p1)= (20-30)/30= -1/3
PED= (1/7)/(-1/3)= -3/7 in absolute value = 3/7= 0.428=0.43
If the PED is less than 1 then it is considered as inelastic.
