How do you interpret the coefficient of the price elasticity of demand? Explain when Ed is 1.5, 0.7, and 1.0
Please provide the best answer for the statement.
The interpretation is based on the elasticity formula. The formula has the percentage change in quantity demanded in the numerator and the percentage change in price in the denominator. A coefficient of 1.5 indicates that demand is elastic because the percentage change in quantity demanded (the numerator) is greater than the percentage change in price (the denominator). A coefficient of 0.7 indicates that demand is inelastic because the percentage change in quantity demanded (the numerator) is less than the percentage change in price (the denominator). A coefficient of 1.0 indicates that demand is unit elastic because the percentage change in quantity demanded (the numerator) is the same as the percentage change in price (the denominator).
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The figure above shows the marginal revenue, marginal cost, and demand curves for an airline offering daily flights between Los Angeles and Toronto. If the airline is regulated using a marginal cost pricing rule total surplus will be ________
A) $100,000 B) $60,000 C) $80,000 D) $20,000
The two types of games include
A) fast and slow. B) sequential and simultaneous. C) price and quantity. D) real and nominal.