Problems using point elasticity, Microeconomics

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?  

Posted Date: 10/10/2012 7:39:02 AM | Location : United States







Related Discussions:- Problems using point elasticity, Assignment Help, Ask Question on Problems using point elasticity, Get Answer, Expert's Help, Problems using point elasticity Discussions

Write discussion on Problems using point elasticity
Your posts are moderated
Related Questions
Question 1: i) Elaborate on the different types of price discrimination that a monopolist may use and what are the required preconditions for its application? ii) What dete

Demand and supply curve for french breads

What is the distinguishes a progressive income tax, from a proportional income tax, or a regressive income tax? A proportional income tax takes the similar percentage of a pe



what is the combined total demand schedule for Delgian cocoa beans that European and USA consumers buy

Determine the Cost Efficient Levels of Emissions Reduction Two firms produce a pollutant called Q.  The total cost of reducing emissions of Q are as follows for Firm 1 and Fir


What are the main weaknesses of using demand-side policies? Trade-off issues a) Growth and low unemployment often come with inflation b) Government stimulatory policies m

Quality Control: Standards and standardisation, quality systems, certification and inspections, measurement systems, testing laboratories, their accreditation and calibration