The owner of a chain of gas stations found that when the price per gallon was...
The owner of a chain of gas stations found that when the price per gallon was $ 3.24 last week, 9,914 gallons were sold. This week, he noticed that when the price per gallon was $ 3.38, 9,034 gallons were sold.
Calculate demand elasticity to the nearest tenth (include the negative sign, as shown in class). Take all of your calculations toward the final answer to three decimal places.
Homework Answers
percentage change in demand = (9034- 9914)/9914
percentage change in price = (3.38-3.24)/3.24
demand elasticity = percentage change in demand/percentage change in price
= [(9034- 9914)/9914]/[(3.38-3.24)/3.24]
= -2.1
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