Suppose that at a price of $2.60, the quantity of output demanded is 17, and at a price of $6.30, the quantity of output demanded is 8. What

Question

Suppose that at a price of $2.60, the quantity of output demanded is 17, and at a price of $6.30, the quantity of output demanded is 8. What is the elasticity of demand? (Ignore the negative sign.)

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niczorrrr 3 years 2021-09-02T12:29:58+00:00 1 Answers 3 views 0

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  1. Latifah
    0
    2021-09-02T12:31:17+00:00
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    Answer: elastic (e = 2.43)

    Explanation:

    The price elasticity formulae is given below as

    Elasticy of price = change in quantity demanded / change in price.

    P1 =$2.60, P2 = $6.30, q1 =17 and q2 = 8

    e = q2 – q1/ P2 – P1

    e = 8 – 17/ 6.30 – 2.60

    e = – 9 /3.7

    e = – 2.43

    We take the modulus of e to have a positive value. Hence e = 2.43

    Since e is greater than 1, then the elasticity of demand is elastic

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