Question

2. Elastic, inelastic, and unit-elastic demand Aa Aa The following graph shows the demand for a good. PRICE (Dollars per unit) W 140 1 Demand х 70 -* 50 1 Z 20 הר--- 1 0 10 25 35 70 QUANTITY For each of the following regions, use the midpoint method to identify whether the demand for this good is elastic, (approximately) unitary elastic, or inelastic. Elastic, Inelastic, or Unitary Elastic? Region Between W and X Between X and Y Between Y and Z

Answer 1

Ans)

E Mid-point formular E (2-Q, 1: (P-P, , W e (70-140 = 25-10 (25+10/2 Go H140)/2 ( -70 S E [5 17.5 105 &=-1- 2857 &=-113 CElastic )

Between X & Y 35-25 E: (35+25)/2 (50170/ 50-70 10 620 30 60 & Cunit elasti Between Y & Z ) =30 E 70-35 (20-50 Got 35/2 = (20 + 50% E = 35 L35 E = -0.78 CINELASTIC 52.5

2. Elastic, inelastic, and unit-elastic demand Aa Aa The following graph shows the demand for a good. PRICE (Dollars per unit) W 140 1 Demand х 70 -* 50 1 Z 20 הר--- 1 0 10 25 35 70 QUANTITY For each of the following regions, use the midpoint method to identify whether the demand for this good is elastic, (approximately) unitary elastic, or inelastic. Region Between W and X Between X and Y Between Y and Z Elastic, Inelastic, or Unitary Elastic? elastic unit elastic inelastic