Question

there t One football season Domino's Pura corporate sponsor of the Wigton Re d uce the price of a bylor very touch e d by the week. Until that year, the Redskins weren't scoring many touchdowns of the Reds scored touchdowns, Dominos pasoud en stor pe The Guany of made in the boo an hour to 100 pies an hour. What was price elasticity of demand for Domino's Pizza Instructions: Enter your response rounded to two decimal places. Remember that price elasticity of demand is expressed as a posterumber Dominou a negative sign in your response Price elasticity of demane

Answer 1

Answer:

Given:

P1 = $8

Q1 = 1

P2 = $2

Q2 = 100

E = percentage change in quantity demand/percentage change in price

Price elasticity of demand = [Q2-Q1/(Q2+Q1/2)] / [P2-P1/(P2+P1/2)]

Percentage Change in Quantity Demanded = [Q2-Q1/(Q2+Q1/2)] * 100

= [[100 – 1] / [100+1]/2] * 100 = 196%

Percentage Change in Price = [P2-P1/(P2+P1/2)] * 100

= [[2 – 8] / [2+8]/2] * 100

= 120%

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

=196 / 120 = 1.63

Price elasticity of demand = 1.63