Question

.
The price elasticity of demand if the price of a pint falls from $8 to $6 is
Part 2 (1 point)
The price elasticity of demand if the price of a pint rises from $6 to $8 is
Part 3 (1 point)
Using the midpoint method to calculate the price elasticity of demand, the price elasticity of demand is

Answer 1

Answer: The answer is elastic demand because elasticity of demand is > than 1

Explanation:Elasticity of demand is the degree of responsiveness of demand to slight change in price of goods. It is calculated as ED=% change in Qd/% change in price

Since Qd is 3 and 5

Qo-Q1/Qo*100%

3 - 5/3*100%

= -2/3*100%

= -200/3

=-66.6%(ignore the minus sign)

Po-P1/Po*100%

8-6/8*100

=2/8*100%

= 25%

ED= 66.6/25

=2.6

6-8/6*100%

=-2/6*100%

=-200/6

=-33.3%

ED= 66.6/33.3

=2

Since the elasticity of demand is greater than 2. Therefore elasticity of demand is elastic