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2. Understanding the arc elasticy of demand Aa Aa Suppose that during the past year, the price of a large-screen television fell from $2,600 to $2,000 per television. During the same time period, consumer sales increased from 650,000 to 700,000 televisions. Calculate the elasticity of demand between these two points by following the steps shown next. After each step, select the appropriate answer. Original Quantity New Quantity Average Quantity Change in Quantity Percentage Change in Quantity Original Price New Price Average Price Change in Price Percentage Change in Price Step 1: Select the correct answers for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and new quantity, and then divide by two. Do the same for the average price. Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the change in price. Step 4: Calculate the percentage change in quantity demanded by dividing the change in quantity by the average quantity. Do the same to calculate the percentage change in price. Step 5: Calculate the price elasticity of demand by dividing the percentage change in quantity demanded by the percentage change in price. The elasticity of demand for large-screen televisions is about: -3.00 -0.28 -0.33 -3.53

2. Understanding the arc elasticy of demand Aa Aa Suppose that during the past year, the price of a large-screen television fell from $2,600 to $2,000 per television. During the same time period, consumer sales increased from 650,000 to 700,000 televisions. Calculate the elasticity of demand between these two points by following the steps shown next. After each step, select the appropriate answer. Original Quantity New Quantity Average Quantity Change in Quantity Percentage Change in Quantity Original Price New Price Average Price Change in Price Percentage Change in Price Step 1: Select the correct answers for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and new quantity, and then divide by two. Do the same for the average price. Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the change in price. Step 4: Calculate the percentage change in quantity demanded by dividing the change in quantity by the average quantity. Do the same to calculate the percentage change in price. Step 5: Calculate the price elasticity of demand by dividing the percentage change in quantity demanded by the percentage change in price. The elasticity of demand for large-screen televisions is about: -3.00 -0.28 -0.33 -3.53

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 2PA
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2. Understanding the arc elasticy of demand Aa Aa Suppose that during the past year, the price of a large-screen television fell from $2,600 to $2,000 per television. During the same time period, consumer sales increased from 650,000 to 700,000 televisions. Calculate the elasticity of demand between these two points by following the steps shown next. After each step, select the appropriate answer. Original Quantity New Quantity Average Quantity Change in Quantity Percentage Change in Quantity Original Price New Price Average Price Change in Price Percentage Change in Price Step 1: Select the correct answers for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and new quantity, and then divide by two. Do the same for the average price. Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the change in price. Step 4: Calculate the percentage change in quantity demanded by dividing the change in quantity by the average quantity. Do the same to calculate the percentage change in price. Step 5: Calculate the price elasticity of demand by dividing the percentage change in quantity demanded by the percentage change in price. The elasticity of demand for large-screen televisions is about: -3.00 -0.28 -0.33 -3.53
Transcribed Image Text:2. Understanding the arc elasticy of demand Aa Aa Suppose that during the past year, the price of a large-screen television fell from $2,600 to $2,000 per television. During the same time period, consumer sales increased from 650,000 to 700,000 televisions. Calculate the elasticity of demand between these two points by following the steps shown next. After each step, select the appropriate answer. Original Quantity New Quantity Average Quantity Change in Quantity Percentage Change in Quantity Original Price New Price Average Price Change in Price Percentage Change in Price Step 1: Select the correct answers for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and new quantity, and then divide by two. Do the same for the average price. Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the change in price. Step 4: Calculate the percentage change in quantity demanded by dividing the change in quantity by the average quantity. Do the same to calculate the percentage change in price. Step 5: Calculate the price elasticity of demand by dividing the percentage change in quantity demanded by the percentage change in price. The elasticity of demand for large-screen televisions is about: -3.00 -0.28 -0.33 -3.53
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