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Calculate the price elasticity of demand

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Reference no: EM133202913

A producer sells two products, X and Y.  He discovers the change in the quantities of X and Y demanded when he raises the price of both products from $6 to $8, as shown in the table below:

Price

X

Y

$6

20

8

$8

19

5

Use the mid-point method, calculate the price elasticity of demand for both X and Y when the price increases from $6 to $8. Classify X and Y products based on the price elasticity of demand.  How does the information of the price elasticity of demand help the producers to earn more revenue?  Explain.

Reference no: EM133202913

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