Label demand as elastic, unit elastic, or inelastic for each scenario. Use the midpoint method when applicable to calculatethe price elasticity of demandContain Yourself!, a plastic container company, raises the price of its signatureLunchbox container from $3.00 to $4.00. As a result, the quantity sold drops from20,000 to 15,000.Economists working for the United States have determined that the elasticity of demandfor gasoline is 0.5Capital Metro decides to increase bus fare rates from $2.00 to $2.21. Consequently, thenumber of passengers who decide to take the bus in Austin drops from an average of70,000 riders a day to an average of 61,000 riders a day.Answer Bankperfectly elasticelasticunit elasticinelasticperfectly inelastic

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Asked Sep 19, 2019
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Label demand as elastic, unit elastic, or inelastic for each scenario. Use the midpoint method when applicable to calculate
the price elasticity of demand
Contain Yourself!, a plastic container company, raises the price of its signature
Lunchbox container from $3.00 to $4.00. As a result, the quantity sold drops from
20,000 to 15,000.
Economists working for the United States have determined that the elasticity of demand
for gasoline is 0.5
Capital Metro decides to increase bus fare rates from $2.00 to $2.21. Consequently, the
number of passengers who decide to take the bus in Austin drops from an average of
70,000 riders a day to an average of 61,000 riders a day.
Answer Bank
perfectly elastic
elastic
unit elastic
inelastic
perfectly inelastic
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Label demand as elastic, unit elastic, or inelastic for each scenario. Use the midpoint method when applicable to calculate the price elasticity of demand Contain Yourself!, a plastic container company, raises the price of its signature Lunchbox container from $3.00 to $4.00. As a result, the quantity sold drops from 20,000 to 15,000. Economists working for the United States have determined that the elasticity of demand for gasoline is 0.5 Capital Metro decides to increase bus fare rates from $2.00 to $2.21. Consequently, the number of passengers who decide to take the bus in Austin drops from an average of 70,000 riders a day to an average of 61,000 riders a day. Answer Bank perfectly elastic elastic unit elastic inelastic perfectly inelastic

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Expert Answer

Step 1

Price elasticity of demand: It is the degree of responsiveness of change in quantity demanded with respect to change in the price of the good.

It can be calculated with the help of the following formula:

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Percentage change in quantitydemanded Percentage change in price AQ x100 Es AP -x 100 P Q2-Q1x100 P2-P100 웨어익|

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Step 2

The nature of elasticity of demand at various elasticities is shown above:

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E4 o(Perfectly Elastic Demand) E4 0(Perfectly Inlastic Demand) E& 1Elastic Demand) E4 <1(Inelastic Demand) E4 1(Unitary Elastic Demand)

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Step 3

As the plastic company raises the price of signature lunchbox container from $3.00 to $4.00, the quantity sold drops down from 20,000 to 15,000 units.

...

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ΔQ x100 ΔΡ x100 P 15000-20000 20000 4-3 Ε Ed 3 -5000 E 20000 1 3 E4 0.75 τε

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