The price of Pepsi changes from $4.75 to $1.00; initialy Yuval consumed 7 cups of pepsi per week and now consumes 18 cups of pepsi per week. Indicate whether the changes are negative or positive and keep 2 decimals. What is the percentage change in price? What is the percentage change in quantity? What is the Price Elasticity of Demand? (Enter a positive number) In this example, pepsi is an OElastic Olnelastic OUnitary Elastic good C % N %
The price of Pepsi changes from $4.75 to $1.00; initialy Yuval consumed 7 cups of pepsi per week and now consumes 18 cups of pepsi per week. Indicate whether the changes are negative or positive and keep 2 decimals. What is the percentage change in price? What is the percentage change in quantity? What is the Price Elasticity of Demand? (Enter a positive number) In this example, pepsi is an OElastic Olnelastic OUnitary Elastic good C % N %
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The price of Pepsi changes from $4.75 to $1.00; initialy Yuval consumed 7 cups of pepsi per week and now consumes 18 cups
of pepsi per week. Indicate whether the changes are negative or positive and keep 2 decimals.
What is the percentage change in price?
What is the percentage change in quantity?
What is the Price Elasticity of Demand?
(Enter a positive number)
In this example, pepsi is an
OElastic
Olnelastic
OUnitary Elastic
good
FI
%
%
Expert Solution
Step 1
i) Change in price = P(final)-P(initial) /P(initial)
Change in price =( 1 - 4.75)/4.75
Change in price =( -)0.7895
Percentage change in price=(-)0.7895x100
Percentage change in price = (-)78.95%
ii)Change in quantity=Q(final)-Q(initial)/Q(initi)
Change in quantity = (18 - 7 ) /7
Change in quantity = 1.5714
Percentage change in quantity= 1.5714 x 100
Percentage change in quantity=157.14%
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