Suppose you were shown a demand curve for bananas and were asked to calculate price elasticity of demand. After doing so, you come up with 1.67 (absolute value). A classmate was asked to derive price elasticity of demand on the identical demand curve and got 0. 75 (absolute value). A bit perplexed, your classmate asks the professor which answer is right? The professor checks both calculations and says, "They're both right." Is this possible? If so, how and why?

Suppose you were shown a demand curve for bananas and were asked to calculate price elasticity of demand. After doing so, you come up with 1.67 (absolute value). A classmate was asked to derive price elasticity of demand on the identical demand curve and got 0. 75 (absolute value). A bit perplexed, your classmate asks the professor which answer is right? The professor checks both calculations and says, "They're both right." Is this possible? If so, how and why?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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