Question

Question Help The following table gives data on the price of rye and the number of bushels of rye sold in 2017 and 2018. Year Price (Dollars per bushel) $3.00 $2.00 Quantity (Bushels) 7,000,000 11,000,000 2017 2018 a. Calculate the change in the quantity of rye demanded divided by the change in the price of rye. Measure the quantity of rye demanded in bushels. The change in the quantity of rye demanded divided by the change in the price of rye in bushels is . (Enter your response as an integer. Include a minus signil necessary b. Calculate the change in the quantity of rye demanded divided by the change in the price of rye, but this time measure the quantity of rye demanded in millions of bushels. The change in the quantity of rye demanded divided by the change in the price of rye in milions of bushels (Enter your response as an integer. Include a minus sign if necessary) Compared to part a, the answer to part bis in absolute forme , ignore the sign of these values) c. Finally, assuming that the demand curve for rye did not shift between 2017 and 2018, use the information in the table to calculate the price elasticity of demand for Using the midpoint formula, the price elasticity of demand for rye is (Enter your response rounded to two decimal places do not forget to include the minus sign) Ma 2.06

Answer 1

Part A

$=\frac{11,000,000-7,000,000}{2-3}=\frac{4,000,000}{-1}=-4,000,000$

Part B

$=\frac{11-7}{2-3}=\frac{4}{-1}=-4$

Compared to part A the value is much smaller.

Part C

$=\frac{11,000,000-7,000,000}{10,000,000}\times 100=40\%$

$=\frac{2-3}{2.50}\times 100=-40\%$

Price elasticity is,

$=\frac{40}{-40}=-1$

Here compared to a it is smaller but larger than b