Answer:
The price of elasticity of demand is 2.59
Step-by-step explanation:
* Lets explain how to solve the problem
- During the past year the price of a laptop computer fell from
$2950 to $2450
- During the same time period consumer sales increased from
430000 to 619000 laptops
- We need to find the price of elasticity of demand
- The rule of price elasticity is:
price elasticity = percentage of change in the quantity ÷
percentage of change in price
* Lets calculate the percentage of change in quantity and the
percentage of chance in price
∵ The percentage of increasing of quantity = (new - old)/old
∵ New = 619000 and old = 430000
∴ The percentage of increasing of quantity =
[tex]\frac{619000-430000}{430000}*100=43.95[/tex]%
∵ The percentage of decreasing of price = (old - new)/old
∵ New = $2450 and old = $2950
∴ The percentage of decreasing of price =
[tex]\frac{2950-2450}{2950}*100=16.95[/tex]%
- Lets substitute these values in the equation above
∴ Price of elasticity of demand = 43.95% ÷ 16.95% = 2.59
* The price of elasticity of demand is 2.59
