Question

Table 2: Shoe Sales per Week Price Quantity Demanded 50 200 40 300 30400A 2a) Refer to Table 2. Use the midpoint formula to calculate the elasticity of demand between a price of $50 and a price of S60. Between a price of $50 and a price of $60, is demand elastic, inelastic, or unitarily elastic? 2b) Refer to Table 2. Use the midpoint formula to calculate the elasticity of demand between a price of $10 and a price of $20. Between a price of $10 and a price of $20, is demand elastic, inelastic, or unitarily elastic?

Answer 1

2a

elasticity of demand will be

=-((100-200)/((100+200)/2))/((60-50)/((60+50)/2))

=3.67

as elasticity of demand is higher than 1, that means demand is elastic

2b

elasticity of demand will be

=-((500-600)/((500+600)/2))/((20-10)/((20+10)/2))

=0.27

as elasticity of demand is lower than 1, that means demand is inelastic

the above is answer..