Can someone help me with this Economics Question, Please?
Suppose the price of apples rises from $3 a pound to $3.45 and your consumption of apples drops from 30 pounds of apples a month to 21 pounds of apples. Calculate your price elasticity of demand of apples. What can you say about your price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic?
Answer:
Your elasticity of Demand is the slope of the demand curve. The slope of a line is calculated as the rise over the run. In this case your price rises 0.45 and your demand drops 9 units. So your elasticity of demand would be 0.45/9 = .05. A slope of 0 (a horizontal line) is perfectly elastic and since your slope is close to zero your demand for apples relatively elastic. This means that you are sensative to changes in the price of apples and if the prices goes up you will be fewer apples.
change in price/change in demand i think 1 = elastic typically
it's not unitary elastic. im almost positive. to find out your answer you take the %change quantity/%change in price and if it is greater than 1 its elastic, less than one its inelastic.
if its one I think its unitary elastic - but i am not sure about it.
Price elasticity of demand= %change in quantity demanded / %change in price
In your case, it is -30%/15%=-2
It is elastic.
If it was equal to -1 it would be unitarily elastic and if it was between 0 and -1 it would be inelastic.
Use price elasticity formula. divide % change in quantity over percent change in price I think... look for examples
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Answer:
Your elasticity of Demand is the slope of the demand curve. The slope of a line is calculated as the rise over the run. In this case your price rises 0.45 and your demand drops 9 units. So your elasticity of demand would be 0.45/9 = .05. A slope of 0 (a horizontal line) is perfectly elastic and since your slope is close to zero your demand for apples relatively elastic. This means that you are sensative to changes in the price of apples and if the prices goes up you will be fewer apples.
change in price/change in demand i think 1 = elastic typically
it's not unitary elastic. im almost positive. to find out your answer you take the %change quantity/%change in price and if it is greater than 1 its elastic, less than one its inelastic.
if its one I think its unitary elastic - but i am not sure about it.
Price elasticity of demand= %change in quantity demanded / %change in price
In your case, it is -30%/15%=-2
It is elastic.
If it was equal to -1 it would be unitarily elastic and if it was between 0 and -1 it would be inelastic.
Use price elasticity formula. divide % change in quantity over percent change in price I think... look for examples
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