Info in images Danny "Dimes" Donahue is a neighborhood's 9-year-old entrepreneur. His most recent venture is selling homemade brownies that hebakes himself. At a price of $2.50 each, he sells 250. At a price of $2.00 each, he sells 300.Instructions: Use the midpoint method and round your answer to two decimal places. Do not include a negative sign (-).a. What is the elasticity of demand?0.11 b. Suppose the price of apples goes up from $20 to $25 a box. In direct response, Goldsboro Farms supplies 1,400 boxes of applesinstead of 1,000 boxes. Compute the coefficient of price elasticity (midpoints approach) for Goldsboro's supply.Instructions: Round your answer to two decimal places.Es = -0.02

Danny “Dimes" Donahue is a neighborhood's 9-year-old entrepreneur. His most recent venture is selling homemade brownies that he bakes himself. At a price of $2.50 each, he sells 250. At a price of $2.00 each, he sells 300.

Danny “Dimes" Donahue is a neighborhood's 9-year-old entrepreneur. His most recent venture is selling homemade brownies that he bakes himself. At a price of $2.50 each, he sells 250. At a price of $2.00 each, he sells 300.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 5SQP: Suppose a university raises its tuition from 3,000 to 3,500. As a result, student enrollment falls...

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Info in images

Danny "Dimes" Donahue is a neighborhood's 9-year-old entrepreneur. His most recent venture is selling homemade brownies that he
bakes himself. At a price of $2.50 each, he sells 250. At a price of $2.00 each, he sells 300.
Instructions: Use the midpoint method and round your answer to two decimal places. Do not include a negative sign (-).
a. What is the elasticity of demand?
0.11

b. Suppose the price of apples goes up from $20 to $25 a box. In direct response, Goldsboro Farms supplies 1,400 boxes of apples
instead of 1,000 boxes. Compute the coefficient of price elasticity (midpoints approach) for Goldsboro's supply.
Instructions: Round your answer to two decimal places.
Es = -0.02

Expert Solution

Step 1

Elasticity = Percentage change in quantity/ Percentage change in price

According to the midpoint method:

Percentage change in quantity = ([Q2-Q1]/[{Q2+Q1}/2])*100

Percentage change in price = ([P2-P1]/[{P2+P1}/2])*100

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