Calculate the elasticity of demand between these two price-quantity combination by using the following steps. After each step, complete the relevant part of the table with the appropiate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign)
Calculate the elasticity of demand between these two price-quantity combination by using the following steps. After each step, complete the relevant part of the table with the appropiate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...
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Transcribed Image Text:CENGAGE MINDTAP
Homework (Ch 05)
eep the Highest 1/2
2. Calculating the price elasticity of demand: A step-by-stepguide
Suppose that during the past year, the price of a virtual reality headset rose from $4,700 to $4,980. During the same time period, consumer sales
decreased from 397,000 to 289,000 headsets
Attempts 1
Calculate the elasticity of demand between these two price-quantity combination by using the following steps. After each step, complete the relevant
part of the table with the appropiate answers (Note: For decreases in price or quantity, enter values in the Change column with a minus sign.)
Original
Percentage Change
Quantity
Price
New
Average
Change
Step 1: Fill in the appropriate values for original quantity, new quantity, original price, and now price
Step 2: Calculate the average quantity by adding the original quantey and the new quantity, and then dividing by two. De 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
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Step 1: Introduce the the concept of elasticity of demand.
VIEWStep 2: Fill in the appropriate values for original quantity, new quantity, original price, and new price.
VIEWStep 3: Calculate the average quantity and average price.
VIEWStep 4: Calculate the change in quantity and change in price.
VIEWStep 5: Calculate the percentage change in quantity demanded and percentage change in price.
VIEWStep 6: Calculate the price elasticity of demand.
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