Question

Elasticity 12 13 14 Overall Score: 61.46% Intro Question 1.2: After raising the price of Ground Beef by 30%, how much of a percentage increase or decrease in sales should Jenny expect? Denote a decrease as negative and round your answer to two decimal places (e.g., -3.02%). Check Answer Calculating Price Elasticity of Demand Item: Ground Beef Price $3.75 Quantity 200 Old Ground Beef used to make hamburgers, meat balls, and other inexpensive meat dishes. New $4.50 170 Price Elasticity of Demand = -0.75 Percentage Change 20.00% -15.00% Welcome to Jenny's Grocery RAISIN CHIPS BRAN COL Apple Cola Organic Whole Milk Potato Chips Ground Beef Raisin Bran

Answer 1

Since no information regarding the price elasticity of demand is given in the text itself, let's take a look below where the price elasticity of demand for ground beef is given to be -0.75 from the earlier sales experience.

Price elasticity of demand for ground beef= %change in Quantity demanded of ground beef÷ % change in price of ground beef

-0.75= % change in Quantity demanded(sales) of ground beef÷ 30

% change in Quantity demanded (sales) of ground beef= -0.75×30 = -22.5

% decrease in sales of ground beef= 22.5

Answer will be -22.5. Negative sign denotes decrease in sales.