Answer:
The approximate price elasticity of demand between these two prices is
- 0.42
Explanation:
In this question ,we use the formula of price elasticity of demand which is shown below:
Price elasticity of demand = Percentage change in quantity demanded ÷ Percentage change in price
where,
Percentage change in quantity demanded is calculated by
= New Quantity - Old quantity ÷ New Quantity + Old quantity
= 350 - 310 ÷ 350 + 310
= 40 ÷ 660
= 0.06060
Percentage change in price is calculated by
= New price - Old price ÷ New price + Old price
= 9 - 12 ÷ 9 + 12
= - 3 ÷ 21
= - 0.14285
Now put these values over the above formula
So, the answer is = 0.06060 ÷ - 0.14285 = - 0.42
Hence, the approximate price elasticity of demand between these two prices is - 0.42
