Question

Suppose that during the past year, the price of a laptop computer rose from $2,750 to $2,880. During the same time period, consumer sales decreased from 446,000 to 321,000 laptops.

Calculate the elasticity of demand between these two price-quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign.)

	Original	New	Average	Change	Percentage Change
Quantity
Price

Answer 1

Write the formulae used for calculations as follows New + Original Average Change = New-Original Change Percenatge change- Average Represent the formula excel sheet as follows: Change Percentage change -C2-B2 Original 2 Quantity 446000 3 Price2750 New 321000 2880 Average C2+B2 C3+B3)/2 C3-B3 2/D2) 100 3/D3)*100 Represent the calculation table as follows 1 2 Quantity 4,46,000321000383500-1,25,000 3 Price OriginalNewAverageChangePercentage change 32.595 4.618 2750 2880 2815 130 Calculate the price elasticity of demand as follows Price elasticity of demand - Percentage change in Quantity Percentage change in price -32.595 4.618 一7.06 Thus, the price elasticity of demand is -7.06