Use the midpoint formula for Es to determine price elasticity of demand for each of the four possible $1 price changes. Instructions: Input the your answers as positive values (absolute values). Round your answers to two decimal places. Moving from $5 to $4: Ed= Moving from $4 to $3: Ed = | Moving from $3 to $2: Ed= Moving from $2 to $1: Ed= b. What can you conclude about the relationship between the slope of the demand curve above and its elasticity? The demand curve above has a constant slope of (Click to select), but elasticity (Click to select) as we move down the curve. c. Explain in a nontechnical way why demand is elastic in the northwest segment of the demand curve and inelastic in the southeast segment. Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. ? When the initial price is high and initial quantity is low, a unit change in price is a low percentage change while a unit change in quantity is a high percentage change. The percentage change in quantity exceeds the percentage change in price, making demand elastic. ? When the initial price is low and initial quantity is high, a unit change in price is a high percentage change while a unit change in quantity is a low percentage change. The percentage change in quantity is less than the percentage change in price, making demand inelastic. ? When the initial price is low and initial quantity is high, a unit change in price is a high percentage change while a unit change in quantity is a low percentage change. The percentage change in quantity is less than the percentage change in price, making demand elastic. ? When the initial price is high and initial quantity is low, a unit change in price is a low percentage change while a unit change in quantity is a high percentage change. The percentage change in quantity exceeds the percentage change in price, making demand inelastic.
Use the midpoint formula for Es to determine price elasticity of demand for each of the four possible $1 price changes. Instructions: Input the your answers as positive values (absolute values). Round your answers to two decimal places. Moving from $5 to $4: Ed= Moving from $4 to $3: Ed = | Moving from $3 to $2: Ed= Moving from $2 to $1: Ed= b. What can you conclude about the relationship between the slope of the demand curve above and its elasticity? The demand curve above has a constant slope of (Click to select), but elasticity (Click to select) as we move down the curve. c. Explain in a nontechnical way why demand is elastic in the northwest segment of the demand curve and inelastic in the southeast segment. Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. ? When the initial price is high and initial quantity is low, a unit change in price is a low percentage change while a unit change in quantity is a high percentage change. The percentage change in quantity exceeds the percentage change in price, making demand elastic. ? When the initial price is low and initial quantity is high, a unit change in price is a high percentage change while a unit change in quantity is a low percentage change. The percentage change in quantity is less than the percentage change in price, making demand inelastic. ? When the initial price is low and initial quantity is high, a unit change in price is a high percentage change while a unit change in quantity is a low percentage change. The percentage change in quantity is less than the percentage change in price, making demand elastic. ? When the initial price is high and initial quantity is low, a unit change in price is a low percentage change while a unit change in quantity is a high percentage change. The percentage change in quantity exceeds the percentage change in price, making demand inelastic.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Use the midpoint formula for Es to determine price elasticity of demand for each of the four possible $1 price changes.
Instructions: Input the your answers as positive values (absolute values). Round your answers to two decimal places.
Moving from $5 to $4: Ed=
Moving from $4 to $3: Ed = |
Moving from $3 to $2: Ed=
Moving from $2 to $1: Ed=
b. What can you conclude about the relationship between the slope of the demand curve above and its elasticity?
The demand curve above has a constant slope of (Click to select), but elasticity (Click to select) as we move down the curve.
c. Explain in a nontechnical way why demand is elastic in the northwest segment of the demand curve and inelastic in the southeast
segment.
Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the
box for the wrong answers.
? When the initial price is high and initial quantity is low, a unit change in price is a low percentage change while a unit change in quantity is a
high percentage change. The percentage change in quantity exceeds the percentage change in price, making demand elastic.
? When the initial price is low and initial quantity is high, a unit change in price is a high percentage change while a unit change in quantity is
a low percentage change. The percentage change in quantity is less than the percentage change in price, making demand inelastic.
? When the initial price is low and initial quantity is high, a unit change in price is a high percentage change while a unit change in quantity is
a low percentage change. The percentage change in quantity is less than the percentage change in price, making demand elastic.
? When the initial price is high and initial quantity is low, a unit change in price is a low percentage change while a unit change in quantity is a
high percentage change. The percentage change in quantity exceeds the percentage change in price, making demand inelastic.
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