Answer:
The demand for signature lunchbox container is inelastic. Price elasticity of demand is -1
The demand for gasoline is inelastic. Price elasticity of demand is 0.5
The demand for bus in Austin is inelastic. Price elasticity of demand is -1.38
Explanation:
Midpoint formula for price elasticity of demand = (change in quantity demanded/average quantity demanded) ÷ (change in price/average price)
Signature lunchbox container
change in quantity demanded = 15,000 - 20,000 = -5000
average quantity demanded = (20,000 + 15,000)/2 = 35,000/2 = 17,500
-5000/17,500 = -0.286
change in price = 4 - 3 = 1
average price = 4+3/2 = 7/2 = 3.5
1/3.5 = 0.286
Price elasticity of demand = -0.286/0.286 = -1. The demand is inelastic because the price elasticity of demand is less than 1
Gasoline
Price elasticity of demand is 0.5. The demand for gasoline is inelastic because the price elasticity of demand is less than 1.
Bus in Austin
change in quantity demanded = 61,000 - 70,000 = -9,000
average quantity demanded = (70,000+61,000)/2 = 65,500
-9,000/65,500 = -0.137
change in price = 2.21 - 2 = 0.21
average price = (2+2.21)/2 = 2.105
0.21/2.105 = 0.0998
Price elasticity of demand = -0.137/0.0998 = -1.38. The demand for bus in Austin is inelastic because the price elasticity of demand is less than 1
