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The figure below represents the weekly demand for GPS units. Demand for GPS Units § g 8 8 Price (dollars) 8 8 Quantity (GPS u
Quantity (GPS units) Instructions: Round your answers to two decimal places. If you are entering any negative numbers be sure
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Answer #1

A)

price falls from $130 to $110 and quantity demanded rises from 140 to 180

price elasticity of demand= percentage change in quantity demanded/percentage change in price

= ((180-140)/140)÷((110-130)/130)

= (40/140)÷(-20/130)

= -1.85

B)

price rises from $110 to $130 and quantity demanded falls from 180 to 140

price elasticity of demand= percentage change in quantity demanded/percentage change in price

= ((140-180)/180)÷((130-110)/110)

= (-40/180)÷(20/110)

= -1.22

C.) Midpoint Formula for price elasticity of demand = ((Q2-Q1)/(Q2+Q1)÷(P2-P1)/(P2+P1))

P1= $130

P2= $110

Q1=140

Q2=180

Price Elasticity of demand= ((180-140)/(180+140))÷((110-130)/(130+110))

= ((40/320)÷(-20/240))

= -1.5

D)

price falls from $70 to $50 and quantity demanded rises from 260 to 300

price elasticity of demand= percentage change in quantity demanded/percentage change in price

= ((50-70)/70)÷((300-260)/260)

= -1.85

E)

price rises from $50 to $70 and quantity demanded falls from 300 to 260

price elasticity of demand= percentage change in quantity demanded/percentage change in price

= ((70-50)/50)÷((260-300)/300)

= -3

F.) Midpoint Formula for price elasticity of demand = ((Q2-Q1)/(Q2+Q1)÷(P2-P1)/(P2+P1))

P1= $70

P2= $50

Q1=260

Q2=300

Price Elasticity of demand= ((300-260)/(300+260))÷((50-70)/(50+70))

= ((40/560)÷(-20/120))

= -0.42

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