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Calculate the price elasticity of demand for rye

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Suppose the following table gives data on the price of rye and the number of bushels of rye sold in 2010 and 2011. 

Year  Price/bushel  Quantity (bushels)

2010   $3.00        8 million

2011   $2.00        14 million

  1. Calculate the price elasticity of demand for rye. 
  2. Is the demand for rye elastic or inelastic? Explain
  3. Based on the calculated elasticity figure you can say that if price of rye increased by 10 percent, quantity of rye sold will fall by _____________ percent.  

Reference no: EM131857761

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