The price of cookies was increased from $4 to $5, the quantity demanded by stores went down 50%, what is price elasticity of dem

Question

goldfiish [28.3K]

3 years ago

11

The price of cookies was increased from $4 to $5, the quantity demanded by stores went down 50%, what is price elasticity of dem

and?

Mathematics

1 answer:

Ede4ka [16] · Answer 1 · 2022-06-09T20:13:03+03:00

Ede4ka [16]3 years ago

7 0

Assume the normal quantity of cookies is x.

The demanded quantity by the stores now:
0.5x
The previous cost is: $4 * 0.5x = $2x

The cost of demanded quantity by the stores now: $5 * 0.5x = $2.5x

The price elasticity of demand: $2.5x - $2x = $0.5x

Hope that helps you