On the demand curve containing the points "A" and "B", the price elasticity of demand for a price cut from $3 to $2 is. (Hint: Include the negative sign and enter your response rounded to two decimal places.) On the demand curve containing the points "A" and "C", the price elasticity of demand for a price cut from $3 to $2 is. (Hint: Include the negative sign and enter your response rounded to two decimal places.)
On the demand curve containing the points "A" and "B", the price elasticity of demand for a price cut from $3 to $2 is. (Hint: Include the negative sign and enter your response rounded to two decimal places.) On the demand curve containing the points "A" and "C", the price elasticity of demand for a price cut from $3 to $2 is. (Hint: Include the negative sign and enter your response rounded to two decimal places.)
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter6: Consumer Choice And Demand
Section: Chapter Questions
Problem 6QFR
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Transcribed Image Text:You own a hot dog stand that you set up outside the student union every day at lunch
time. Currently, you are selling hot dogs for a price of $3, and you sell 30 hot dogs a day
(point A on the diagram). You are considering cutting the price to $2. The graph shows two
possible increases in the quantity sold as a result of your price cut. Use the information in the
graph (new quantities are given on the horizontal axis) to calculate the price elasticity
between these two prices on each of the demand curves. Use the midpoint formula to
calculate the price elasticities.
On the demand curve containing the points "A" and "B", the price elasticity of demand for a
price cut from $3 to $2 is. (Hint: Include the negative sign and enter your response
rounded to two decimal places.)
On the demand curve containing the points "A" and "C", the price elasticity of demand for a
price cut from $3 to $2 is. (Hint: Include the negative sign and enter your response
rounded to two decimal places.)
Price (dollars per hot dog)
5
A
B
D2
44
52
30
Quantity (hot dogs per day)
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