Economics For Today
Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
Question
Chapter 5, Problem 4SQP

(a)

To determine

Price elasticity of demand.

(a)

Expert Solution
Check Mark

Explanation of Solution

The general formula for calculating price elasticity of demand is given below.

Price elasticity of demand curve=QuantityNewQuantityOld(QuantityNew+QuantityOld2)PriceNewPriceOld(PriceNew+PriceOld2) (1)

Substitute the respective values in Equation (1) to calculate the price elasticity of demand in the first case.

Price elasticity of demand=(4020(40+202))(2025(20+252))=(2030)(522.5)=0.6666660.222222=3

Price elasticity of demand is 3 (ignore the sign).

Economics Concept Introduction

Price elasticity of demand: Price elasticity refers to the responsiveness of changes or the change in quantity demanded due to the change in price.

(b)

To determine

Price elasticity of demand.

(b)

Expert Solution
Check Mark

Explanation of Solution

By using Equation (1), the calculation of price elasticity of demand in second case is shown below:

Price elasticity of demand=(6040(60+402))(1520(15+202))=(2050)(517.5)=0.40.285714=1.4

Price elasticity of demand is 1.4.

Economics Concept Introduction

Price elasticity of demand: Price elasticity refers to the responsiveness of changes or the change in quantity demanded due to the change in price.

(c)

To determine

Price elasticity of demand.

(c)

Expert Solution
Check Mark

Explanation of Solution

By using Equation (1), the calculation of price elasticity of demand in third case is shown below:

Price elasticity of demand=(8060(80+602))(1015(10+152))=(2070)(512.5)=0.2857140.4=0.71

Price elasticity of demand is .71.

Economics Concept Introduction

Price elasticity of demand: Price elasticity refers to the responsiveness of changes or the change in quantity demanded due to the change in price.

(d)

To determine

Change in demand and supply.

(d)

Expert Solution
Check Mark

Explanation of Solution

By using Equation (1), the calculation of price elasticity of demand in fourth case is shown below:

Price elasticity of demand=(10080(100+802))(510(5+102))=(2090)(57.5)=0.2222220.666666=0.33

Price elasticity of demand is .33.

Economics Concept Introduction

Price elasticity of demand: Price elasticity refers to the responsiveness of changes or the change in quantity demanded due to the change in price.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Chapter 5 Solutions

Economics For Today

Knowledge Booster
Recommended textbooks for you
  • Micro Economics For Today
    Economics
    ISBN:9781337613064
    Author:Tucker, Irvin B.
    Publisher:Cengage,
    Economics For Today
    Economics
    ISBN:9781337613040
    Author:Tucker
    Publisher:Cengage Learning
    Survey Of Economics
    Economics
    ISBN:9781337111522
    Author:Tucker, Irvin B.
    Publisher:Cengage,
  • Essentials of Economics (MindTap Course List)
    Economics
    ISBN:9781337091992
    Author:N. Gregory Mankiw
    Publisher:Cengage Learning
    Principles of Economics 2e
    Economics
    ISBN:9781947172364
    Author:Steven A. Greenlaw; David Shapiro
    Publisher:OpenStax
    Exploring Economics
    Economics
    ISBN:9781544336329
    Author:Robert L. Sexton
    Publisher:SAGE Publications, Inc
  • Micro Economics For Today
    Economics
    ISBN:9781337613064
    Author:Tucker, Irvin B.
    Publisher:Cengage,
    Economics For Today
    Economics
    ISBN:9781337613040
    Author:Tucker
    Publisher:Cengage Learning
    Survey Of Economics
    Economics
    ISBN:9781337111522
    Author:Tucker, Irvin B.
    Publisher:Cengage,
    Essentials of Economics (MindTap Course List)
    Economics
    ISBN:9781337091992
    Author:N. Gregory Mankiw
    Publisher:Cengage Learning
    Principles of Economics 2e
    Economics
    ISBN:9781947172364
    Author:Steven A. Greenlaw; David Shapiro
    Publisher:OpenStax
    Exploring Economics
    Economics
    ISBN:9781544336329
    Author:Robert L. Sexton
    Publisher:SAGE Publications, Inc