Explain why does the magnitude of price elasticity differ

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Reference no: EM1327127

The demand schedule for the product 'xyz' is given below:

Price($) Quantity demanded
3 20
4 15
5 11
6 9
7 7

Task: Based on the above data, solve the questions given below:

Compute the point price elasticity of demand for an increase in the price from $5 to $6.

Compute the point price elasticity of demand for a decrease in the price from $6 to $5.

Why does the magnitude of price elasticity differ in a and b above, although the same set of price-quantity combinations are used to compute the price elasticity of demand? Is their an alternative method that can be used?

 

Reference no: EM1327127

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