Question

18. Consider the following demand and supply schedule for eggs in USA for a given mooth (quantity figures are in millions of dozens): Price per dozen Quantity demanded Quantity supplied $0.50 $1.00 $1.50 $2.00 $2.50 a. Calculate the price elasticity of demand for a price change from $0.50 to $1.00, from $1.00 to $1.50, from $1.50 to $2.00, and from $2.00 to $2.50. (calculate the change in total expenditure if consumers could buy the quantities they wanted at sach prise. . i.e., ignore the supply curve for now). Organize all of this information neatly into a table.

Answer 1

Elasticity of Par te Penciper als as dozen 0.50 40 90 100 30 30 1.50 20 10 2 30 to 2.50 no 10 X 0.75 -0.4285 Z > Le to be a -1 + 2 x 2.7 = 104 .x2.25 = 1.2857