Find the price elasticity of demand at each price

Reference no: EM13224026

Granny's Restaurant sells apple pies. Granny knows that the demand curve for her pies does not shift over time, but she wants to learn more about that demand. She has tested the market for her pies by charging different prices. When she charges $4 per pie, she sells 30 pies per week. When she charges $5 per pie, she sells 24 pies per week. If she charges $4.50, she sells 27 apple pies per week.

a. Is the apple pie market perfectly competitive? Why or why not?

b. With this data, draw a graph of the linear demand curve for Granny's apple pies.

c. Find the price elasticity of demand at each of the three prices.

Reference no: EM13224026

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