Question

LILJEHODUL 40L-409)-9176-c/576/3041/activities/9bb2389c-3dd9-41cd-b147-13 Luiz: Chapter 6 Save fe Che figure to the right Wustrates the demand for taxi rides in a large city Suppose the price per ride initially $20 but then falls to $5 due to a recession. What is the price elasticity of demand for taxi rides? Using the midpoint formula, the price elasticity of demand is (Enter your response rounded to two decimal places.) Demand is Packars pende) 4000 0000 120.000 100.000 200.000 240.000 Enter your answer in the answer box

Answer 1

Since; pore elasticity of derrord (PED) is given by.- (ma port formula) PED= .fo change in the quantity demord of change in price

200000 14000, 2000007 1 40090 (20-5) 60000 x 1025 7oooo IPED 0.88 g (in elastic dement) 2