Question

If you know the demand schedule for a product, you can calculate elasticity values for each price and quantity combination. If the demand curve is a straight line, the calculation is simple, and takes two steps:

Step 1: calculate the slope of the demand curve.  ______________

Step 2: For the price and quantity combination you have chosen, calculate the following:

Price elasticity of demand  =   1/slope  *  P/Q

This calculation is known as the point elasticity formula.

Try it with the following demand schedule.

Price	Quantity	Point elasticity
10	80	2.5
9	100
8	120
7	140
6	160
5	180
4	200

Answer 1

Elasticity = b. b 2.5 = b 10 . bere slope = t 1 = 0. Price Quantity Point 10 80 elasticity 2,5 loo 2009) 1.8 109 120 20(8) - 120 1.33 140 20 (7) 6 160 2016) = 160 0.75 s 180 2015) = 0.56 180 200 2004 = 0.4