Answered: If the price of Pepsi-Cola increases…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section19.1: Elasticity: Part 1

Problem 1ST: On Tuesday, the price and quantity demanded are 7 and 120 units, respectively. Ten days later, the...

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If the price of Pepsi-Cola increases from 40 cents to 50 cents per can and the quantity demanded decreases from 100 cans to 50 cans, then the value of the price elasticity of demand for Pepsi-Cola is:

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Introduction

Price elasticity describes how a good's supply or demand fluctuates as a result of fluctuating prices. In other words, it evaluates how consumers respond to a change in an item's price.

Price elasticity of demand describes how variations in price impact the amount of a good that is demanded. On the other hand, price elasticity of supply describes how variations in price impact the amount of a good that is supplied.

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