Hala Haj Hamad Given: Initial price = 10 New price 8 Percentage change in quantity demanded = 12%

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Please write the attached text in handwriting. Thanks
Hala Haj Hamad
Given:
Initial price = 10
New price 8
Percentage change in quantity demanded =
12%
Step2
b)
The formula to compute the price elasticity of
demand is:
% change in quantity demand
% change in price
ed
The percent change in price is:
% change in price=New price-Initial price 100
Original price
=10 x 100
=25%
The price elasticity of demand is:
% change in quantity demande
ea=
% change in price
=0. 48
Hence, the price elasticity of demand is 0.48.
Transcribed Image Text:Hala Haj Hamad Given: Initial price = 10 New price 8 Percentage change in quantity demanded = 12% Step2 b) The formula to compute the price elasticity of demand is: % change in quantity demand % change in price ed The percent change in price is: % change in price=New price-Initial price 100 Original price =10 x 100 =25% The price elasticity of demand is: % change in quantity demande ea= % change in price =0. 48 Hence, the price elasticity of demand is 0.48.
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