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The accompanying table shows the price and monthly demand for barrels of gosum berries in Gondwanaland.
Price of gosum berries per barrel Native Demand for gosum berries per month
$100 0
$90 100
$80 200
$70 300
$60 400
$50 500
$40 600
$30 700
$20 800
$10 900
$0 1000
A. Using the midpoint method (show your work), calculate the price elasticity of demand when the price of a barrel of gosum berries rises from $10 to $20. What kind of elasticity is this value that you computed for the price elasticity of demand and what does it mean for how demand will changebased on a change in price within this price range?
B. Using the midpoint method (show your work), calculate the price elasticity of demand when the price of a barrel of gosum berries rises from $70 to $80. What kind of elasticity is this value that you computed for the price elasticity of demand and what does it mean for how demand will changebased on a change in price within this price range?
C. Notice that the estimates from (a) and (b) above are different. Why do price elasticity of demand estimates change along the demand curve?
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