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The Point Elasticity formula for finding Price Elasticity of Demand The Point Elasticity formula for finding Price Elasticity of Demand

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Question

1 (elastic), = 1 (unitary elasticity), or <1 (inelastic). It is not expressed as a percentage or dollar value. It measures consumers' sensitivity to price changes by calculating the ratio of the change in quantity demanded that occurs in response to a change in price. Using the Point Elasticity formula, please calculate the Price Elasticity of Demand (Ed) given the following demand schedule;Quantity Demanded;Price;20;$5.00;15;$6.00;How do we interpret the elasticity measure in this example? Is the Price Elasticity of Demand elastic, inelastic or unitary elasticity?

 

Paper#29407 | Written in 18-Jul-2015

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