Soru
Rain spoils the strawberry crop, the price of strawberries rises from 6 to 8 a box, and the quantity demanded decreases from 600 to 200 boxes a week. Calculate the price elasticity of demand over this price range. Describe the demand for strawberries. Over the price range of 6 to 8, the price elasticity of demand is square >>> Answer to 2 decimal places
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3.2
(182 Oylar)
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Usta · 5 yıl öğretmeni
Uzman doğrulaması
Cevap
To calculate the price elasticity of demand, we can use the following formula:Price elasticity of demand = (Percentage change in quantity demanded) / (Percentage change in price)First, let's calculate the percentage change in quantity demanded:Percentage change in quantity demanded = (New quantity - Old quantity) / Old quantity * 100= (200 - 600) / 600 * 100= -66.67%Next, let's calculate the percentage change in price:Percentage change in price = (New price - Old price) / Old price * 100= (8 - 6) / 6 * 100= 33.33%Now, we can calculate the price elasticity of demand:Price elasticity of demand = (-66.67%) / (33.33%)= -2.00Therefore, the price elasticity of demand over this price range is -2.00.The negative value indicates that the demand for strawberries is elastic, meaning that the quantity demanded is relatively responsive to changes in price. In this case, a 1% increase in price leads to a 2% decrease in quantity demanded.