Economics Question

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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As we answer the 3 sub parts and no particular sub part is mentioned so we will answer first 3 sub parts. Please resubmit the question specifying the sub part you'd like to be answered.

a)

To draw the demand curve for given schedule:

Economics homework question answer, step 1, image 1

Step 2

b)

For the price elasticity of demand using the mid point formula:

The elasticity of demand can be calculated as-

Ed = (Qd2-Qd1)/Midpoint Qd(P2-P1)/Midpoint P

 Moving from $5 to $4:

Ed = (2-1)/1.5(4-5)/4.5= -3.045

Moving from $4 to $3:

Ed = (3-2)/2.5(3-4)/3.5= -1.40007

Moving from $3 to $2:

Ed = (4-3)/3.5(2-3)/2.5= -0.71425

Moving from $2 to $1:

Ed = (5-4)/4.5(1-2)1.5= -0.328

 

 

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