Answered: How to calculate elasticity?

Business

Economics

How to calculate elasticity?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 10RQ: What is the formula for calculating elasticity?

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Question

How to calculate elasticity?

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Elasticity is responsiveness of change in quantity demanded towards change in price.

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What is the formula for calculating elasticity?
The price elasticity of demand for personal computers is estimated to be 2.2. If the price of personal computers declines by 20 percent, what will be the expected percentage increase in the quantity of computers sold?
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