Answer:
0.539
Explanation:
Price elasticity of demand measure the responsiveness of demand against the change in price of the product. It shows how much demand changes if there is the change in price.
Under mid-point method the price elasticity can be calculated as follow
where
S = Quantity
P = Price
Change in Quantity = ( S2 - S1 ) / [ ( S2 + S1 )/2 ]
Change in Quantity = ( 6,060 - 7,070 ) / [ ( 6,060 + 7,070 )/2 ]
Change in Quantity = -1,010 / 6,565
Change in Quantity = -0.153846
Change in price = ( P2 - P1 ) / [ ( P2 + P1 )/2 ]
Change in price = ( $4,004 - $3,003 ) / [ ( $4,004 + $3,003 )/2 ]
Change in price = $1,001 / $3,503.5
Change in price = 0.285714
Elasticity of Supply = Change in Quantity / Change in Price
Elasticity of Supply = -0.153846 / 0.285714 = -0.5385
Elasticity of Supply = -0.539
