Suppose that during the past year, the price of a laptop computer fell from $2,500 to $2,300. During the same time period, consumer sales increased from 403,000 to 549,000 laptops. Calculate the price elasticity of demand between these two price-quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. Quantity Demanded Price Absolute Change $ Average $ Percentage Change (in decimals) Step 1: Calculate the absolute change in the quantity demanded. Do the same for the absolute change in price. Step 2: Calculate the average quantity by adding the original quantity and the new quantity and then dividing by 2. Do the same for the average price. Step 3: Calculate the percentage change, expressed as decimals, in quantity demanded by dividing the absolute change in quantity demanded by the average quantity. Do the same to calculate the percentage change in price. Step 4: Calculate the price elasticity of demand by dividing the percentage change in quantity demanded by the percentage change in price. Using the midpoint method, the price elasticity of demand for laptops is about

Suppose that during the past year, the price of a laptop computer fell from $2,500 to $2,300. During the same time period, consumer sales increased from 403,000 to 549,000 laptops. Calculate the price elasticity of demand between these two price-quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. Quantity Demanded Price Absolute Change $ Average $ Percentage Change (in decimals) Step 1: Calculate the absolute change in the quantity demanded. Do the same for the absolute change in price. Step 2: Calculate the average quantity by adding the original quantity and the new quantity and then dividing by 2. Do the same for the average price. Step 3: Calculate the percentage change, expressed as decimals, in quantity demanded by dividing the absolute change in quantity demanded by the average quantity. Do the same to calculate the percentage change in price. Step 4: Calculate the price elasticity of demand by dividing the percentage change in quantity demanded by the percentage change in price. Using the midpoint method, the price elasticity of demand for laptops is about

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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