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Calculate the price elasticity of demand for coffee

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Reference no: EM131790757

Question: (A) Starbucks:

If the price of Starbucks coffee increase from $4 to $6, the quantity purchased decreases from 1,000 to 500. Using middle point elasticity formula to calculate the elasticity of demand of Starbucks coffee.

(B) Dunkin Donuts:

The initial price of a cup of coffee is $1, and at that price, 400 cups are demanded. If the price falls to $0.90, the quantity demanded will increase to 500.

Calculate the price elasticity of demand for coffee for Dunkin Donuts.

Reference no: EM131790757

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