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“The table above gives the demand schedule for pears. Between point C and point D. the price elasticity of demand is"

The Table Above Gives The Demand Schedule For Pears Between Point C And Point D The Price Elasticity Of Demand Is class=

Sagot :

The elasticity of demand can be calculated by dividing the percentage change in the quantity demanded of a good or service by the percentage change in price.

The data for point C are: Price=$6, Quantity=8

The data for point D are: Price=$4, Quantity=12

The percent change in the quantity demanded is:

[tex]\begin{gathered} pc1=\frac{12-8}{8} \\ pc1=\frac{4}{8} \\ pc1=0.5 \end{gathered}[/tex]

We calculated the ratio instead of the percentage, but it will work fine.

The percent change in price is:

[tex]\begin{gathered} pc2=\frac{4-6}{6} \\ pc2=-\frac{2}{6} \\ pc2=-0.33 \end{gathered}[/tex]

The elasticity of demand is:

[tex]\begin{gathered} e=\frac{0.5}{-0.33} \\ e=-1.5 \end{gathered}[/tex]

Since the absolute value of the elasticity is greater than one, the demand is said to be elastic.

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