i need help with this microeconmics question 5 ## 5. Calculating the Price Elasticity of Demand: A Step-by-Step GuideSuppose that during the past year, the price of a laptop computer rose from $2,750 to $2,880. During the same time period, consumer sales decreased from 446,000 to 321,000 laptops.Calculate the elasticity of demand between these two price-quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (*Note: For decreases in price or quantity, enter values in the Change column with a minus sign.*)### Table: Price Elasticity of Demand Calculation| | Original | New | Average | Change | Percentage Change ||-------|-----------|----------|----------|-------------|-------------------|| Quantity | | | | | || Price | $ | $ | | $ | |### Step-by-Step Instructions:**Step 1:**Fill in the appropriate values for original quantity, new quantity, original price, and new price.**Step 2:**Calculate the average quantity by adding the original quantity and the new quantity, and then dividing by two. Do the same for the average price.**Step 3:**Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the change in price.**Step 4:**Calculate the percentage change in quantity demanded by dividing the change in quantity by the average quantity. Do the same to calculate the percentage change in price.**Step 5:**Calculate the price elasticity of demand by dividing the percentage change in quantity demanded by the percentage change in price, ignoring the negative sign.---### Calculation Example Using Provided Data:**1. Fill in Values:**| | Original | New | | ||-------|-----------|---------|--------|------|| Quantity | 446,000 | 321,000 | | || Price | $2,750 | $2,880 | | |**2. Calculate Averages:**- Average Quantity = (446,000 + 321,000) / 2- Average Price = ($2,750 + $2,880) / 2**3. Calculate Changes:**- Change in Quantity = 321,000 - 446,000

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5. Calculating the price elasticity of demand: A step-by-stepguide Suppose that during the past year, the price of a laptop computer rose from $2,750 to $2,880. During the same time period, consumer sales decreased from 446,000 to 321,000 laptops.

5. Calculating the price elasticity of demand: A step-by-stepguide Suppose that during the past year, the price of a laptop computer rose from $2,750 to $2,880. During the same time period, consumer sales decreased from 446,000 to 321,000 laptops.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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i need help with this microeconmics question 5

## 5. Calculating the Price Elasticity of Demand: A Step-by-Step Guide

Suppose that during the past year, the price of a laptop computer rose from $2,750 to $2,880. During the same time period, consumer sales decreased from 446,000 to 321,000 laptops.

Calculate the elasticity of demand between these two price-quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (*Note: For decreases in price or quantity, enter values in the Change column with a minus sign.*)

### Table: Price Elasticity of Demand Calculation

| | Original | New | Average | Change | Percentage Change |
|-------|-----------|----------|----------|-------------|-------------------|
| Quantity | | | | | |
| Price | $ | $ | | $ | |

### Step-by-Step Instructions:

**Step 1:**
Fill in the appropriate values for original quantity, new quantity, original price, and new price.

**Step 2:**
Calculate the average quantity by adding the original quantity and the new quantity, and then dividing by two. Do the same for the average price.

**Step 3:**
Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the change in price.

**Step 4:**
Calculate the percentage change in quantity demanded by dividing the change in quantity by the average quantity. Do the same to calculate the percentage change in price.

**Step 5:**
Calculate the price elasticity of demand by dividing the percentage change in quantity demanded by the percentage change in price, ignoring the negative sign.

---

### Calculation Example Using Provided Data:

**1. Fill in Values:**

| | Original | New | | |
|-------|-----------|---------|--------|------|
| Quantity | 446,000 | 321,000 | | |
| Price | $2,750 | $2,880 | | |

**2. Calculate Averages:**

- Average Quantity = (446,000 + 321,000) / 2
- Average Price = ($2,750 + $2,880) / 2

**3. Calculate Changes:**

- Change in Quantity = 321,000 - 446,000

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