elasticity

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
Give exact answer and take like
Use the demand schedule, graph, and the elasticity formula to answer one question. POPCORN Price \times Quantity
Demanded
Total Revenue $0.50 1 $
0.50 0.45 2 0.90 0.40 4 1.60 0.35 6 2.10 0.30 8 2.40 0.25 12 3.00 0.20 16 3.20 0.15 20 3.00 0.10 25 2.50 0.05 30 1.50 A
graph relates price per ounce along the y axis to quantity demanded in ounces per shows along the x axis."The x axis
ranges from 0 to 30 and the y axis ranges from 0 dollars to 0.55 dollars. The line passes through the points: 1, $
0.50. 2, 0.45.4, 0.4.6, 0.35.8, 0.3.12, 0.25.16, 0.2.20, 0.15.25, 0.1.30, 0.05. " Economists estimate price elasticities
more precisely by using average price and quantity to compute percentage changes. The formula below describes this
method. Price Elasticity of Demand, Midpoint Formula: E = percentage change in quantity demanded - percentage
change in price, in absolute value where, percentage change in quantity demanded = (Q2 Q1) [(Q1 + Q2) -: 2]
percentage change in price = (P2 - P1) - [(P1 + P2) - 2] Note that the denominator in each part uses the average
quantity or the average price. Using the table, graph, and formula, compute E for a popcorn price increase from 15 cents
to 25 cents per ounce. Instructions: Round your response to one decimal place.
-:
Transcribed Image Text:Use the demand schedule, graph, and the elasticity formula to answer one question. POPCORN Price \times Quantity Demanded Total Revenue $0.50 1 $ 0.50 0.45 2 0.90 0.40 4 1.60 0.35 6 2.10 0.30 8 2.40 0.25 12 3.00 0.20 16 3.20 0.15 20 3.00 0.10 25 2.50 0.05 30 1.50 A graph relates price per ounce along the y axis to quantity demanded in ounces per shows along the x axis."The x axis ranges from 0 to 30 and the y axis ranges from 0 dollars to 0.55 dollars. The line passes through the points: 1, $ 0.50. 2, 0.45.4, 0.4.6, 0.35.8, 0.3.12, 0.25.16, 0.2.20, 0.15.25, 0.1.30, 0.05. " Economists estimate price elasticities more precisely by using average price and quantity to compute percentage changes. The formula below describes this method. Price Elasticity of Demand, Midpoint Formula: E = percentage change in quantity demanded - percentage change in price, in absolute value where, percentage change in quantity demanded = (Q2 Q1) [(Q1 + Q2) -: 2] percentage change in price = (P2 - P1) - [(P1 + P2) - 2] Note that the denominator in each part uses the average quantity or the average price. Using the table, graph, and formula, compute E for a popcorn price increase from 15 cents to 25 cents per ounce. Instructions: Round your response to one decimal place. -:
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 10 images

Blurred answer
Knowledge Booster
Elasticity of demand
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education