Is the demand elastic-inelastic or unit elastic

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Reference no: EM131082051

The market price of organic spinach at a local farmers market increases from $1.20 per pound to $1.40 per pound. The quantity of spinach demanded falls from 800 pounds per week to 600 pounds per week.

a) Use the ARC (mid-point) formula to calculate the price elasticity of demand (Ep) for spinach.

b) Is the demand elastic, inelastic, or unit elastic?

c) What happened to total revenue as they raised the price? Show your work.

d) If the price of spinach were to drop by 5% a month from now, by what percentage will the quantity demanded change?

Reference no: EM131082051

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