Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds
Using the midpoint method, what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?
The price elasticity of demand is 0.23. (The price elasticity is calculated from [(100 pounds - 95 pounds) ÷ 97.5 pounds] ÷ [($0.80 - $1.00 ) ÷ $0.90] = 0.23.) Because the elasticity is less than one, the demand is inelastic.
Economics
You might also like to view...
Which of the following is not a property of a typical indifference curve?
a. downward sloping b. bowed away from the origin c. does not intersect another indifference curve d. a higher one is preferred to a lower one
Economics
For collusion to make sense, the payoff matrix must be a
A. positive-sum game. B. zero-sum game. C. negative-sum game. D. negative-positive-sum game.
Economics