Question

2. Calculating the price elasticity of demand - A step-by-stepguide Suppose that during the past year, the price of a laptop computer fell from $2,350 to $1,930. During the same time period, consumer sales increased from 436,000 to 537,000 laptops. Calculate the elasticity of demand between these two price

Answer 1

	Original	New	Average	Change	% Change
Quantity	436000	537000	486500	101000	20.76%
Price	$ 2,350	$ 1,930	$ 2,140	$ -420	-19.63%

Elasticity = % change in quantity / % change in price
= 20.76% / -19.63%
= -1.0577
= -1.06