How calculate the elasticity of demand

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Reference no: EM13860986

Question 1

P          0          1          2          3          4          5          6

Qd       60        50        40        30        20        10        0

A.  Graph the data above

b.   Calculate the elasticity of demand, using the point formula, as price drops from $6 to 5, then from 5 to 4, 4 to 3, 3 to 2, 2 to 1, and, 1 to 0.  Show all work.

C.  Calculate the price elasticity of demand, using the mid point formula, for the same price changes as listed in part b.  Show all work

d  Why are the numbers in part b and part c different?  Explain as they relate to the formulas

e.  For each calculation in part c, state:  if the price elastic, unitary or inelastic; what portion of the demand curve it is located on (upper, middle or lower); and what is the relationship between the % change in Qd and the % change in P for each calculation;

 

 

Reference no: EM13860986

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