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The accompanying table shows the price and monthly demand for barrels of gosum berries in Gondwanaland.
Price of gosum berries per barrel
Native Demand for gosum berries per month
$100
0
$90
100
$80
200
$70
300
$60
400
$50
500
$40
600
$30
700
$20
800
$10
900
$0
1000
1. Using the midpoint method (show your work), calculate the price elasticity of demand when the price of barrel of gosum berries rises from $10 to $20. What does this estimate imply about the price elasticity of demand of gosum berries?
2. Using the midpoint method (show your work), calculate the price elasticity of demand when the price of barrel of gosum berries rises from $70 to $80. What does this estimate imply about the price elasticity of demand of gosum berries?
3. Notice that the estimates from (a) and (b) above are different. Why do price elasticity of demand estimates change along the demand curve?
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