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Use the letter of your last name to determine over which price range you will calculate the elasticity of demand. A-D ($11-$9) E-J ($9-$7) K-N ($5-$3) O-Z ($3-$1) 1. Elasticity a. Calculate elasticity of demand. Show the formula and how you substituted in the numbers, then do the calculation. Remember to take the absolute value!! I want to see the calculations. It is probably easiest if you show me your work on a separate sheet of paper, take a photo, and put the photo in the drop box. Be sure your name is visible. Price Quantity Demanded $11 5 $9 15 $7 25 $5 35 $3 45 $1 55 b. Is demand elastic or inelastic over the price range

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jepessoa

Answer:

since your Brainly user starts with an O, I will calculate the price elasticity of demand for $3 - $1. I will use the midpoint method since we are given a range of values instead of just one value:

price elasticity of demand (PED) = % change in quantity demanded / % change in price

  • % change in quantity demanded = (Q2 - Q1) / [(Q2 + Q1)/2] = (45 - 55) / [(45 + 55)/2] = -10 / 50 = -0.2 = -20%
  • % change in price = (P2 - P1) / [(P2 + P1)/2] = ($3 - $1) / [($3 + $1)/2] = $2 / $2 = 1 = 100%

PED = -20% / 100% = -0.2 or |0.2| in absolute value, price inelastic

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