Compute the price elasticity of demand for paint

Assignment Help Microeconomics

Reference no: EM13198617

Individual Project Deliverable Length: 1-2 page Word document
Points Possible: 150 Due Date: 4/3/2011 11:59:59 PM CT

Suppose you are a painter, and the price of a gallon of paint increases from $3.00 a gallon to $3.50 a gallon. Your usage of paint drops from 35 gallons a month to 20 gallons a month. Perform the following:

Compute the price elasticity of demand for paint and show your calculations.
Decide whether the demand for paint is elastic, unitary elastic, or inelastic.
Explain your reasoning and interpret your results.

Reference no: EM13198617

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