Compute for the price elasticity of demand when the price increased from P120 to 250 and the quantity demanded decreased from 750 to 500 units. Show in a graph where P is on the Y Axis and QD on the X Axis.

Compute for the price elasticity of demand when the price increased from P120 to 250 and the quantity demanded decreased from 750 to 500 units. Show in a graph where P is on the Y Axis and QD on the X Axis.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 13SQP

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Question

Compute for price elasticity of demand when the price increased from 120 to 250 and the quantity demanded decreased from 750 to 500 units. Show in a graph where P is on the Y axis and QD on the X axis. Use the formula below and interpret the result.

Compute for the price elasticity of demand when the price increased from P120
to 250 and the quantity demanded decreased from 750 to 500 units.
Show in a graph where P is on the Y Axis and QD on the X Axis.
Solve using the formula:
QD2 - QD1
% change in QD
Ave QD
PED =
% change in P
P2 - P1
Ave P
Interpret the result.

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