contestada

The owner of a produce store found that when the price of a head of lettuce was raised from 50 cents to $1, the quantity sold per hour fell from 18 to 8. The arc elasticity of demand for lettuce is ________.

Respuesta :

jepessoa

Answer:

-1.15

Explanation:

the arc elasticity of demand is calculated by dividing % change in quantity demanded by % change in price:

midpoint Q = (8 + 18) / 2 = 13

midpoint P = (0.50 + 1) / 2 = 0.75

% change in quantity demanded = (Q2 – Q1) / midpoint Q = (8 – 18) / 13 = -0.77

% change in price = (P2 – P1) / midpoint P = (1 – 0.5) / 0.75 = 0.67

PED = -0.77 / 0.67 = -1.15

Otras preguntas