Oliva Ncemi NAME 1\00 0MAM SECTION# PRINT LAST NAME, FIRST NAME PRICE ELASTICITY OF DEMAND Price elasticity of demand is calculated as: 1. the a. percentage change in quantity demanded divided by the percentage change in price. the percentage change in price divided by the percentage change in quantity demanded. btov b. 8. and the responsiveness of equilibrium price to a shift in the demand curve. c. d. the responsiveness of equilibrium price to a shift in the supply curve. If the quantity demanded of coffee decreased by 10% when the price of coffee increased by 15%, the price elasticity of demand for coffee is is said to be 2. and the demand for coffee 10% 2/3; elastic 2/3; inelastic a. 3/2; elastic 3/2; inelastic C. b.) d. Olbb 3. If the quantity demanded of soda decreased by 15% when the price of soda increased by 15%, the price elasticity of demand for soda is and the demand for soda is said to be i5% is0%0 0; unit elastic 0; inelastic a. 1; unit elastic 1; inelastic c. b. Adgid If the public transit system raises its fares and experiences an increase in total revenue as a result, the demand for public transportation in this price range is: 4. inelastic. unit elastic. neither elastic nor inelastic. a. C. elastic. d. b. When the price of a hotdog at the ballpark is $2.00, quantity demanded is 1,000. When the price of a hotdog at the ballpark is $2.50, quantity demanded is 850. Using the midpoint formula, price elasticity of demand is approximately , so an increase in the price of a hotdog 5. total revenue. 0.7; increases 0.7; decreases 1.4; increases 1.4; decreases C. a. d. b. Assume a wireless company has hired you as a consultant to help determine what price to charge for local weekday airtime. You establish that the price elasticity of demand for local weekday airtime is 0.62. If the goal of the company is to increase the revenue generated from the sale of weekday airtime, you should advise the company to: raise the price of weekday air time because demand is elastic. raise the price of weekday air time because demand is inelastic. lower the price of weekday air time because demand is elastic. lower the price of weekday air time because demand is inelastic. 6. a. b. C. d. Chapter 5 Assignments 99 nand