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What is the price elasticity of demand

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Q1 - The rain spoiled much of the strawberry harvest. As a result, the price rises from $4 to $6 per box and the quantity demanded falls from 1,000 to 600 boxes per week.

a) What is the price elasticity of demand?

b)-Indicate if Demand is elastic or inelastic

Q2 - When Alex's income increased from $3,000 to $5,000, he increased his consumption of donuts from 4 to 8 per month and reduced his consumption of pancakes from 12 to 6 per month.

a) Calculate Alex's income elasticity of demand for donuts. State whether it is elastic or inelastic.

b) Calculate Alex's income elasticity of demand for muffins. State whether it is elastic or inelastic.

Q3 - If a 12 percent increase in the price of orange juice causes a 22% decrease in the quantity of orange juice demanded and a 14% increase in the quantity of apple juice demanded, calculate:

a) The price elasticity of demand for orange juice. State whether it is elastic or inelastic.

b) The cross elasticity of demand between orange juice and apple juice. State whether it is elastic or inelastic.

Reference no: EM133150561

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