a. What is the price elasticity of demand along the range of the demand curve between a price of $0.80 and quantity of 10 per miniburger and a price of $0.40 and quantity of 80 per miniburger?
In order to calculate the price elasticity of demand, we need to use the following formula:
Price elasticity of demand = % change in quantity demanded / % change in price
First, we can calculate the % change in quantity demanded:
% change in quantity demanded = (change in quantity demanded / initial quantity demanded) * 100
= ((80 - 10) / 10) * 100
= (70 / 10) * 100
= 700%
Next, we can calculate the % change in price:
% change in price = (change in price / initial price) * 100
= ((0.40 - 0.80) / 0.80) * 100
= (-0.40 / 0.80) * 100
= -50%
Now we can plug these values into the price elasticity of demand formula:
Price elasticity of demand = 700% / (-50%)
= -14
Therefore, the price elasticity of demand along this range of the demand curve is -14.
To calculate the price elasticity of demand, we can use the following formula:
Price Elasticity of Demand = (Percentage Change in Quantity Demanded) / (Percentage Change in Price)
Let's calculate the percentage changes first.
Percentage Change in Quantity Demanded = [(New Quantity - Old Quantity) / Old Quantity] * 100
Percentage Change in Price = [(New Price - Old Price) / Old Price] * 100
Given:
Old Price = $0.80
New Price = $0.40
Old Quantity = 10
New Quantity = 80
Calculating the percentage changes:
Percentage Change in Quantity Demanded = [(80 - 10) / 10] * 100 = 700%
Percentage Change in Price = [(0.40 - 0.80) / 0.80] * 100 = -50%
Using the values in the formula:
Price Elasticity of Demand = (700%) / (-50%)
Simplifying the expression:
Price Elasticity of Demand = - (700% / 50%)
Price Elasticity of Demand = -14
Therefore, the price elasticity of demand along the range of the demand curve between a price of $0.80 and quantity of 10 per miniburger and a price of $0.40 and quantity of 80 per miniburger is -14.
To calculate the price elasticity of demand, we need to find the percentage change in quantity demanded divided by the percentage change in price. Here's how you can calculate the price elasticity of demand:
Step 1: Calculate the percentage change in quantity demanded.
- Subtract the initial quantity from the final quantity: 80 - 10 = 70
- Find the average quantity: (80 + 10) / 2 = 45
- Calculate the percentage change in quantity: (70 / 45) * 100 = 155.56%
Step 2: Calculate the percentage change in price.
- Subtract the initial price from the final price: $0.40 - $0.80 = -$0.40
- Find the average price: ($0.40 + $0.80) / 2 = $0.60
- Calculate the percentage change in price: (-$0.40 / $0.60) * 100 = -66.67%
Step 3: Calculate the price elasticity of demand.
- Divide the percentage change in quantity demanded by the percentage change in price: 155.56% / -66.67% = -2.33
The price elasticity of demand along the range of the demand curve between a price of $0.80 and quantity of 10 per miniburger and a price of $0.40 and quantity of 80 per miniburger is -2.33.