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

Statistics, define statistics in plural and singular sense

define statistics in plural and singular sense

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

Problem, For each of the following scenarios, you use a SS & DD diagram to ...

For each of the following scenarios, you use a SS & DD diagram to demonstrate the effect of a given shock on equilibrium price and quantity in specified competitive market. Explain

Shares and slavery, Shares: Financial assets that represent ownership of a ...

Shares: Financial assets that represent ownership of a small proportion of total equity (or net wealth) of a corporation. Shares can be sold and bought on a stock market. Slaver

Market failures - rationale in era of globalisation, Market failures (eve...

Market failures (even when they do not have international external effects) i) Self-fulfilling bank runs, government debt runs, currency crises. ii) Liquidation costs of li

Utility functions, can you help me answer an economics question

can you help me answer an economics question

Exchange, China had to convert its yuan into dollars. Does that cause the ...

China had to convert its yuan into dollars. Does that cause the dollar to appreciate or depreciate?

Production, define and explain theory of production?

define and explain theory of production?

Define the term supply, Demand is defined as a schedule of the quantities f...

Demand is defined as a schedule of the quantities fo good that will be purchased at various prices similarly the supply refers to the schedule of the quantities of a good that will

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