(a) Price elasticity when price changes by $5.

Question

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Answer 1

Question

Chapter 6, Problem 1E

To determine

(a)

Price elasticity when price changes by $5.

Expert Solution

Answer to Problem 1E

At price $10 per unit, price elasticity of demand -0.71.

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, price elasticity of demand = -3.67

Explanation of Solution

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, quantity demanded is 100 units, and at price $10 per unit quantity demanded = 80 unit, thus, the elasticity at first point = $5 per unit where price = $5 per unit and quantity demanded = 100 units

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

P₁= $5, Q₁ = 100

P₂ = $10, Q₂= 80

Ed= (80−100)(10−5)×(10+5)(80+100)

Ed= −205×15180 = −0.33

Thus, E_d= -0.33

At price $10 per unit, quantity demanded 80 units, elasticity of demand is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−80)(15−10)×( 15+10)(80+60)Ed= −205×25140 = −0.71

At price $10 per unit, price elasticity of demand -0.71.

At price $15 per unit, quantity demanded = 60 units, so elasticity is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−60)(20−15)×( 15+20)(60+40)Ed= −205×35100 = −1.4

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, quantity demanded = 40 units, elasticity is calculated as follows:

Ed= (20−40)(25−20)×( 20+25)(40+20)Ed= −205×4560 = −3

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, the quantity of demand = 20 units, so, elasticity is calculated as:

Ed= (10−20)(30−25)×( 25+30)(20+10)Ed= −105×5530 = −3.67

At price $25 per unit, price elasticity of demand = -3.67

Economics Concept Introduction

Introduction:

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

To determine

(b)

Price elasticity when price changes by $10.

Expert Solution

Answer to Problem 1E

At price $5 with price changes of $10, price elasticity of demand is -0.5.

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 with price changes of $10, price elasticity of demand is -2.

At price changes $10, the price elasticity of demand is -3.

Explanation of Solution

Using price changes of $10, we compare the price and quantity changes with $10 increments.

E_d as per mid-point method.

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, the quantity demanded is 100 units and at price $15 per unit, the quantity demanded is 60 units, thus elasticity at $5 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−100)(15−5)×( 5+15)(100+60)Ed= −4010×20160 = −0.5

Thus, at price $5 with price changes of $10, price elasticity of demand is -0.5

At price of $10 per unit. Quantity demanded = 80 unit and at price = $20 per unit, quantity demanded= 40 units, thus, elasticity at $10 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−80)(20−10)×( 10+20)(80+40)Ed= −4010×30120 = −1

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 per unit, quantity demanded= 60 units and at price $25 per unit, quantity demanded = 20 units, thus elasticity at $15 per unit is:

Ed= (20−60)(25−15)×( 15+25)(60+20)Ed= −4010×4080 = −2

Thus, at price $15 with price changes of $10, price elasticity of demand is -2.

At price $20 per unit, quantity demanded = 40 units and at price = $30 per unit, quantity demanded = 10 units, thus elasticity at $20 per unit.

Ed= (10−40)(30−20)×( 20+30)(40+10)Ed= −3010×5050 = −3

Thus, at price changes $10, the price elasticity of demand is -3.

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Answer 2

Question

Chapter 6, Problem 1E

To determine

(a)

Price elasticity when price changes by $5.

Expert Solution

Answer to Problem 1E

At price $10 per unit, price elasticity of demand -0.71.

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, price elasticity of demand = -3.67

Explanation of Solution

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, quantity demanded is 100 units, and at price $10 per unit quantity demanded = 80 unit, thus, the elasticity at first point = $5 per unit where price = $5 per unit and quantity demanded = 100 units

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

P₁= $5, Q₁ = 100

P₂ = $10, Q₂= 80

Ed= (80−100)(10−5)×(10+5)(80+100)

Ed= −205×15180 = −0.33

Thus, E_d= -0.33

At price $10 per unit, quantity demanded 80 units, elasticity of demand is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−80)(15−10)×( 15+10)(80+60)Ed= −205×25140 = −0.71

At price $10 per unit, price elasticity of demand -0.71.

At price $15 per unit, quantity demanded = 60 units, so elasticity is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−60)(20−15)×( 15+20)(60+40)Ed= −205×35100 = −1.4

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, quantity demanded = 40 units, elasticity is calculated as follows:

Ed= (20−40)(25−20)×( 20+25)(40+20)Ed= −205×4560 = −3

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, the quantity of demand = 20 units, so, elasticity is calculated as:

Ed= (10−20)(30−25)×( 25+30)(20+10)Ed= −105×5530 = −3.67

At price $25 per unit, price elasticity of demand = -3.67

Economics Concept Introduction

Introduction:

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

To determine

(b)

Price elasticity when price changes by $10.

Expert Solution

Answer to Problem 1E

At price $5 with price changes of $10, price elasticity of demand is -0.5.

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 with price changes of $10, price elasticity of demand is -2.

At price changes $10, the price elasticity of demand is -3.

Explanation of Solution

Using price changes of $10, we compare the price and quantity changes with $10 increments.

E_d as per mid-point method.

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, the quantity demanded is 100 units and at price $15 per unit, the quantity demanded is 60 units, thus elasticity at $5 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−100)(15−5)×( 5+15)(100+60)Ed= −4010×20160 = −0.5

Thus, at price $5 with price changes of $10, price elasticity of demand is -0.5

At price of $10 per unit. Quantity demanded = 80 unit and at price = $20 per unit, quantity demanded= 40 units, thus, elasticity at $10 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−80)(20−10)×( 10+20)(80+40)Ed= −4010×30120 = −1

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 per unit, quantity demanded= 60 units and at price $25 per unit, quantity demanded = 20 units, thus elasticity at $15 per unit is:

Ed= (20−60)(25−15)×( 15+25)(60+20)Ed= −4010×4080 = −2

Thus, at price $15 with price changes of $10, price elasticity of demand is -2.

At price $20 per unit, quantity demanded = 40 units and at price = $30 per unit, quantity demanded = 10 units, thus elasticity at $20 per unit.

Ed= (10−40)(30−20)×( 20+30)(40+10)Ed= −3010×5050 = −3

Thus, at price changes $10, the price elasticity of demand is -3.

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Answer 3

Question

Chapter 6, Problem 1E

To determine

(a)

Price elasticity when price changes by $5.

Expert Solution

Answer to Problem 1E

At price $10 per unit, price elasticity of demand -0.71.

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, price elasticity of demand = -3.67

Explanation of Solution

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, quantity demanded is 100 units, and at price $10 per unit quantity demanded = 80 unit, thus, the elasticity at first point = $5 per unit where price = $5 per unit and quantity demanded = 100 units

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

P₁= $5, Q₁ = 100

P₂ = $10, Q₂= 80

Ed= (80−100)(10−5)×(10+5)(80+100)

Ed= −205×15180 = −0.33

Thus, E_d= -0.33

At price $10 per unit, quantity demanded 80 units, elasticity of demand is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−80)(15−10)×( 15+10)(80+60)Ed= −205×25140 = −0.71

At price $10 per unit, price elasticity of demand -0.71.

At price $15 per unit, quantity demanded = 60 units, so elasticity is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−60)(20−15)×( 15+20)(60+40)Ed= −205×35100 = −1.4

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, quantity demanded = 40 units, elasticity is calculated as follows:

Ed= (20−40)(25−20)×( 20+25)(40+20)Ed= −205×4560 = −3

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, the quantity of demand = 20 units, so, elasticity is calculated as:

Ed= (10−20)(30−25)×( 25+30)(20+10)Ed= −105×5530 = −3.67

At price $25 per unit, price elasticity of demand = -3.67

Economics Concept Introduction

Introduction:

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

To determine

(b)

Price elasticity when price changes by $10.

Expert Solution

Answer to Problem 1E

At price $5 with price changes of $10, price elasticity of demand is -0.5.

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 with price changes of $10, price elasticity of demand is -2.

At price changes $10, the price elasticity of demand is -3.

Explanation of Solution

Using price changes of $10, we compare the price and quantity changes with $10 increments.

E_d as per mid-point method.

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, the quantity demanded is 100 units and at price $15 per unit, the quantity demanded is 60 units, thus elasticity at $5 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−100)(15−5)×( 5+15)(100+60)Ed= −4010×20160 = −0.5

Thus, at price $5 with price changes of $10, price elasticity of demand is -0.5

At price of $10 per unit. Quantity demanded = 80 unit and at price = $20 per unit, quantity demanded= 40 units, thus, elasticity at $10 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−80)(20−10)×( 10+20)(80+40)Ed= −4010×30120 = −1

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 per unit, quantity demanded= 60 units and at price $25 per unit, quantity demanded = 20 units, thus elasticity at $15 per unit is:

Ed= (20−60)(25−15)×( 15+25)(60+20)Ed= −4010×4080 = −2

Thus, at price $15 with price changes of $10, price elasticity of demand is -2.

At price $20 per unit, quantity demanded = 40 units and at price = $30 per unit, quantity demanded = 10 units, thus elasticity at $20 per unit.

Ed= (10−40)(30−20)×( 20+30)(40+10)Ed= −3010×5050 = −3

Thus, at price changes $10, the price elasticity of demand is -3.

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Answer 4

Question

Chapter 6, Problem 1E

To determine

(a)

Price elasticity when price changes by $5.

Expert Solution

Answer to Problem 1E

At price $10 per unit, price elasticity of demand -0.71.

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, price elasticity of demand = -3.67

Explanation of Solution

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, quantity demanded is 100 units, and at price $10 per unit quantity demanded = 80 unit, thus, the elasticity at first point = $5 per unit where price = $5 per unit and quantity demanded = 100 units

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

P₁= $5, Q₁ = 100

P₂ = $10, Q₂= 80

Ed= (80−100)(10−5)×(10+5)(80+100)

Ed= −205×15180 = −0.33

Thus, E_d= -0.33

At price $10 per unit, quantity demanded 80 units, elasticity of demand is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−80)(15−10)×( 15+10)(80+60)Ed= −205×25140 = −0.71

At price $10 per unit, price elasticity of demand -0.71.

At price $15 per unit, quantity demanded = 60 units, so elasticity is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−60)(20−15)×( 15+20)(60+40)Ed= −205×35100 = −1.4

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, quantity demanded = 40 units, elasticity is calculated as follows:

Ed= (20−40)(25−20)×( 20+25)(40+20)Ed= −205×4560 = −3

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, the quantity of demand = 20 units, so, elasticity is calculated as:

Ed= (10−20)(30−25)×( 25+30)(20+10)Ed= −105×5530 = −3.67

At price $25 per unit, price elasticity of demand = -3.67

Economics Concept Introduction

Introduction:

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

To determine

(b)

Price elasticity when price changes by $10.

Expert Solution

Answer to Problem 1E

At price $5 with price changes of $10, price elasticity of demand is -0.5.

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 with price changes of $10, price elasticity of demand is -2.

At price changes $10, the price elasticity of demand is -3.

Explanation of Solution

Using price changes of $10, we compare the price and quantity changes with $10 increments.

E_d as per mid-point method.

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, the quantity demanded is 100 units and at price $15 per unit, the quantity demanded is 60 units, thus elasticity at $5 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−100)(15−5)×( 5+15)(100+60)Ed= −4010×20160 = −0.5

Thus, at price $5 with price changes of $10, price elasticity of demand is -0.5

At price of $10 per unit. Quantity demanded = 80 unit and at price = $20 per unit, quantity demanded= 40 units, thus, elasticity at $10 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−80)(20−10)×( 10+20)(80+40)Ed= −4010×30120 = −1

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 per unit, quantity demanded= 60 units and at price $25 per unit, quantity demanded = 20 units, thus elasticity at $15 per unit is:

Ed= (20−60)(25−15)×( 15+25)(60+20)Ed= −4010×4080 = −2

Thus, at price $15 with price changes of $10, price elasticity of demand is -2.

At price $20 per unit, quantity demanded = 40 units and at price = $30 per unit, quantity demanded = 10 units, thus elasticity at $20 per unit.

Ed= (10−40)(30−20)×( 20+30)(40+10)Ed= −3010×5050 = −3

Thus, at price changes $10, the price elasticity of demand is -3.

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Answer 5

Chapter 6, Problem 1E

To determine

(a)

Price elasticity when price changes by $5.

Expert Solution

Answer to Problem 1E

At price $10 per unit, price elasticity of demand -0.71.

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, price elasticity of demand = -3.67

Explanation of Solution

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, quantity demanded is 100 units, and at price $10 per unit quantity demanded = 80 unit, thus, the elasticity at first point = $5 per unit where price = $5 per unit and quantity demanded = 100 units

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

P₁= $5, Q₁ = 100

P₂ = $10, Q₂= 80

Ed= (80−100)(10−5)×(10+5)(80+100)

Ed= −205×15180 = −0.33

Thus, E_d= -0.33

At price $10 per unit, quantity demanded 80 units, elasticity of demand is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−80)(15−10)×( 15+10)(80+60)Ed= −205×25140 = −0.71

At price $10 per unit, price elasticity of demand -0.71.

At price $15 per unit, quantity demanded = 60 units, so elasticity is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−60)(20−15)×( 15+20)(60+40)Ed= −205×35100 = −1.4

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, quantity demanded = 40 units, elasticity is calculated as follows:

Ed= (20−40)(25−20)×( 20+25)(40+20)Ed= −205×4560 = −3

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, the quantity of demand = 20 units, so, elasticity is calculated as:

Ed= (10−20)(30−25)×( 25+30)(20+10)Ed= −105×5530 = −3.67

At price $25 per unit, price elasticity of demand = -3.67

Economics Concept Introduction

Introduction:

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

To determine

(b)

Price elasticity when price changes by $10.

Expert Solution

Answer to Problem 1E

At price $5 with price changes of $10, price elasticity of demand is -0.5.

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 with price changes of $10, price elasticity of demand is -2.

At price changes $10, the price elasticity of demand is -3.

Explanation of Solution

Using price changes of $10, we compare the price and quantity changes with $10 increments.

E_d as per mid-point method.

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, the quantity demanded is 100 units and at price $15 per unit, the quantity demanded is 60 units, thus elasticity at $5 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−100)(15−5)×( 5+15)(100+60)Ed= −4010×20160 = −0.5

Thus, at price $5 with price changes of $10, price elasticity of demand is -0.5

At price of $10 per unit. Quantity demanded = 80 unit and at price = $20 per unit, quantity demanded= 40 units, thus, elasticity at $10 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−80)(20−10)×( 10+20)(80+40)Ed= −4010×30120 = −1

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 per unit, quantity demanded= 60 units and at price $25 per unit, quantity demanded = 20 units, thus elasticity at $15 per unit is:

Ed= (20−60)(25−15)×( 15+25)(60+20)Ed= −4010×4080 = −2

Thus, at price $15 with price changes of $10, price elasticity of demand is -2.

At price $20 per unit, quantity demanded = 40 units and at price = $30 per unit, quantity demanded = 10 units, thus elasticity at $20 per unit.

Ed= (10−40)(30−20)×( 20+30)(40+10)Ed= −3010×5050 = −3

Thus, at price changes $10, the price elasticity of demand is -3.

Answer 6

Chapter 6, Problem 1E

To determine

(a)

Price elasticity when price changes by $5.

Expert Solution

Answer to Problem 1E

At price $10 per unit, price elasticity of demand -0.71.

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, price elasticity of demand = -3.67

Explanation of Solution

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, quantity demanded is 100 units, and at price $10 per unit quantity demanded = 80 unit, thus, the elasticity at first point = $5 per unit where price = $5 per unit and quantity demanded = 100 units

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

P₁= $5, Q₁ = 100

P₂ = $10, Q₂= 80

Ed= (80−100)(10−5)×(10+5)(80+100)

Ed= −205×15180 = −0.33

Thus, E_d= -0.33

At price $10 per unit, quantity demanded 80 units, elasticity of demand is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−80)(15−10)×( 15+10)(80+60)Ed= −205×25140 = −0.71

At price $10 per unit, price elasticity of demand -0.71.

At price $15 per unit, quantity demanded = 60 units, so elasticity is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−60)(20−15)×( 15+20)(60+40)Ed= −205×35100 = −1.4

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, quantity demanded = 40 units, elasticity is calculated as follows:

Ed= (20−40)(25−20)×( 20+25)(40+20)Ed= −205×4560 = −3

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, the quantity of demand = 20 units, so, elasticity is calculated as:

Ed= (10−20)(30−25)×( 25+30)(20+10)Ed= −105×5530 = −3.67

At price $25 per unit, price elasticity of demand = -3.67

Economics Concept Introduction

Introduction:

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

Answer 7

Chapter 6, Problem 1E

To determine

(a)

Price elasticity when price changes by $5.

Answer 8

Expert Solution

Answer to Problem 1E

At price $10 per unit, price elasticity of demand -0.71.

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, price elasticity of demand = -3.67

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, quantity demanded is 100 units, and at price $10 per unit quantity demanded = 80 unit, thus, the elasticity at first point = $5 per unit where price = $5 per unit and quantity demanded = 100 units

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

P₁= $5, Q₁ = 100

P₂ = $10, Q₂= 80

Ed= (80−100)(10−5)×(10+5)(80+100)

Ed= −205×15180 = −0.33

Thus, E_d= -0.33

At price $10 per unit, quantity demanded 80 units, elasticity of demand is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−80)(15−10)×( 15+10)(80+60)Ed= −205×25140 = −0.71

At price $10 per unit, price elasticity of demand -0.71.

At price $15 per unit, quantity demanded = 60 units, so elasticity is calculated as follows:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−60)(20−15)×( 15+20)(60+40)Ed= −205×35100 = −1.4

At price $15, price elasticity of demand = -1.4.

At price $20 per unit, quantity demanded = 40 units, elasticity is calculated as follows:

Ed= (20−40)(25−20)×( 20+25)(40+20)Ed= −205×4560 = −3

At price $20 per unit, the price elasticity of demand = -3.

At price $25 per unit, the quantity of demand = 20 units, so, elasticity is calculated as:

Ed= (10−20)(30−25)×( 25+30)(20+10)Ed= −105×5530 = −3.67

At price $25 per unit, price elasticity of demand = -3.67

Answer 13

Economics Concept Introduction

Introduction:

The arc or mid-point elasticity is calculated in the following way:

Elasticity of Demand (E_d) as per mid-point method:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)/2(Q2+Q1)/2

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

Answer 14

To determine

(b)

Price elasticity when price changes by $10.

Expert Solution

Answer to Problem 1E

At price $5 with price changes of $10, price elasticity of demand is -0.5.

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 with price changes of $10, price elasticity of demand is -2.

At price changes $10, the price elasticity of demand is -3.

Explanation of Solution

Using price changes of $10, we compare the price and quantity changes with $10 increments.

E_d as per mid-point method.

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, the quantity demanded is 100 units and at price $15 per unit, the quantity demanded is 60 units, thus elasticity at $5 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (60−100)(15−5)×( 5+15)(100+60)Ed= −4010×20160 = −0.5

Thus, at price $5 with price changes of $10, price elasticity of demand is -0.5

At price of $10 per unit. Quantity demanded = 80 unit and at price = $20 per unit, quantity demanded= 40 units, thus, elasticity at $10 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Ed= (40−80)(20−10)×( 10+20)(80+40)Ed= −4010×30120 = −1

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 per unit, quantity demanded= 60 units and at price $25 per unit, quantity demanded = 20 units, thus elasticity at $15 per unit is:

Ed= (20−60)(25−15)×( 15+25)(60+20)Ed= −4010×4080 = −2

Thus, at price $15 with price changes of $10, price elasticity of demand is -2.

At price $20 per unit, quantity demanded = 40 units and at price = $30 per unit, quantity demanded = 10 units, thus elasticity at $20 per unit.

Ed= (10−40)(30−20)×( 20+30)(40+10)Ed= −3010×5050 = −3

Thus, at price changes $10, the price elasticity of demand is -3.

Answer 15

To determine

(b)

Price elasticity when price changes by $10.

Answer 16

Expert Solution

Answer to Problem 1E

At price $5 with price changes of $10, price elasticity of demand is -0.5.

At price $10 with price changes of $10, price elasticity of demand = -1

At price $15 with price changes of $10, price elasticity of demand is -2.

At price changes $10, the price elasticity of demand is -3.

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Expert Solution

Answer 20

Explanation of Solution

Using price changes of $10, we compare the price and quantity changes with $10 increments.

E_d as per mid-point method.

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)

Where E_d = coefficient of elasticity

P₁ = Initial Price

P₂ = New Price

Q₁ = Initial Quantity

Q₂ = New Quantity

At price $5 per unit, the quantity demanded is 100 units and at price $15 per unit, the quantity demanded is 60 units, thus elasticity at $5 per unit is:

Ed= (Q2−Q1)(P2−P1)×(P2+P1)(Q2+Q1)