Calculate the price elasticity of demand for bottled water

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The demand for bottled water in a small town is as follows: Price per bottle Quantity demanded $1.00 500 $1.50 400 $2.00 300 $2.50 200 $3.00 100

1. Is this a straight line demand curve? How do you know?

2. Calculate the price elasticity of demand for bottled water for a price rise from $1.00 to $1.50. Is demand elastic or inelastic for this price change?

3. Calculate the price elasticity of demand for a price rise from $2.50 to $3.00. Is demand elastic or inelastic for this price change?

Reference no: EM13209331

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