Question

1. During a particular week last spring, suppose that the price of a ½ pound slab of wild King salmon at the local grocery store was $12.00; currently the price is $10.00. The manager informs you that 150 packages were sold this week, more than the 100 boxes that were sold during that particular week last spring when the price was $12.00. Calculate the price elasticity of demand (point formula, not midpoint/arc formula—consult the textbook) for ½ pound slabs of wild King salmon. Based solely on your calculation, is the demand relatively elastic or relatively inelastic?

Answer 1