5. Calculating the price elasticity of demand: A step-by-stepguide
Suppose that during the past year, the price of a laptop computer fell from $2,350 to $1,930. During the same time period, consumer sales increased from 436,000 to 537,000 laptops.
Homework Answers
Solution:
We can fill in the required values as follows:
| Quantity | Price | |
| Original | 436,000 | 2,350 |
| New | 537,000 | 1,930 |
| Average | (436000 + 537000)/2 = 486,500 | (2350 + 1930)/2 = 2,140 |
| Change | 537000 - 436000 = 101,000 | 1930 - 2350 = -420 |
| Percentage change | (101000/486500)*100 = 20.76% | (-420/2140)*100 = -19.63% |
Elasticity of demand for laptops = percentage change in quantity/percentage change in price
ed = (-20.76/19.63) = -1.0576 (if answer is required in absolute terms: 1.0576)
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Suppose that during the past year, the price of a laptop computer fell from $2,350 to $1,930.
2. Calculating the price elasticity of demand - A step-by-stepguide Suppose that during the past year,...
2. Calculating the price elasticity of demand - A step-by-stepguide Suppose that during the past year, the price of a laptop computer fell from $2,350 to $1,930. During the same time period, consumer sales increased from 436,000 to 537,000 laptops. Calculate the elasticity of demand between these two price
2. Calculating the price elasticity of demand: A step-by-stepguide
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Suppose that during the past year, the price of a laptop computer fell from $2,950 to $2,450. During the same time period, consumer sales increased from 430,000 to 619,000 laptops.
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