Problems using point elasticity, Microeconomics

Assignment Help:

Problems Using Point Elasticity

- We may need to compute price elasticity over portion of demand curve instead of at a single point.

- The price and quantity used as base will alter price elasticity of demand.

Point Elasticity of Demand: An Example

-Assume that

  • Price rises from 8$ to $10 quantity demanded falls from 6 to 4
  • The percent change in price equals: $2/$8 = 25% or $2/$10 = 20%
  • The percent change in quantity equals: -2/6 = -33.33% or -2/4 = -50%

 Elasticity equals:

 -33.33/.25 = -1.33 or -.50/.20 = -2.54

-Which one is correct out of these?  


Related Discussions:- Problems using point elasticity

PPC, WHAT IS PPC

WHAT IS PPC

Equations, Ask q3x+5=20 uestion #Minimum 100 words accepted#

Ask q3x+5=20 uestion #Minimum 100 words accepted#

Energies of the diametric molecules of a gas, Energies of the diametric mol...

Energies of the diametric molecules of a gas, chemistry assignments The analysis basis for treating these different types of motion can be seen by describing the motion of a di

The free enterprise: price system, The Free Enterprise:  Price System ...

The Free Enterprise:  Price System The free market system is where the decision about what is produced is the outcome of millions of separate individual decisions made by cons

Explain why both the pes and ped tend to be inelastic, Explain why both the...

Explain why both the PES and PED tend to be inelastic in the short run for primary goods. PED deals with (primarily) the ability and propensity of consumers to switch to other

Williamson''s model, williomson''s model of managerial discretion

williomson''s model of managerial discretion

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd