Use the following hypothetical demand schedule for movies to do exercises 1-2 Price. /. Quantity 100 /. 5 80 /. 10 60 /. 15 40 /. 20 20 /. 25 10 /. 30 A)determine the price elasticity of demand at each quantity demanded using the arc or midpoint formula. Percentage change in quantity demanded =(Q2-Q1)/Q1 divided by percentage change in price =(P2-P1)/P1. B) redo exercise l a using price changes of $10 rather than $5

Use the following hypothetical demand schedule for movies to do exercises 1-2 Price. /. Quantity 100 /. 5 80 /. 10 60 /. 15 40 /. 20 20 /. 25 10 /. 30 A)determine the price elasticity of demand at each quantity demanded using the arc or midpoint formula. Percentage change in quantity demanded =(Q2-Q1)/Q1 divided by percentage change in price =(P2-P1)/P1. B) redo exercise l a using price changes of $10 rather than $5

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...

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(Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?
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