Using the starting point method, what is the price elasticity of demand from a price of $4.00 to a price of $4.50 per iced coffe
e?
1 answer:
Answer:
The question is missing the graph as well as the options in the attached.
The elasticity of demand is 4,since the figure is greater than 1,demand is said to be elastic.
Unit elastic is not as elasticity is greater than 1
Explanation:
The formula starting point method for elasticity of demand is given as :-[(New quantity-Old quantity)/(New price-Old price)] *[Old price/Old quantity]
New price=$4.5
Old price=$4
From the graph quantity was 50 units at new price,100 units at old price
Elasticity of dd=-(50-100)/(4.5-4)*(4/100)=4
The formula has a negative sign because the relationship between price and quantity is inverse.
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