Due to tariffs imposed on trade, the price of Chinese textiles have increased from $4 to $5. AS a result of this price increase, Vietnamese textiles, which are exempt from the tariff, have seen their demand go from 600 to 800. Please calculate the elasticity using the midpoint method and explain why demand for Vietnamese good changed the way they did.
Due to tariffs imposed on trade, the price of Chinese textiles have increased from $4 to $5. AS a result of this price increase, Vietnamese textiles, which are exempt from the tariff, have seen their demand go from 600 to 800. Please calculate the elasticity using the midpoint method and explain why demand for Vietnamese good changed the way they did.
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 8PA: The New York Times reported (Feb. 17, 1996) that subway ridership declined after a fare increase:...
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