Question

Using the starting point method, what is the price elasticity of demand from a price of $4.50 to a price of $4.00 per pack of 100 screws

Answer 1

Answer:

The price elasticity of demand is -9.00.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

The table below shows the weekly demand for machine screws at the local hardware store.

Price (dollars per pack of 100 screws)   Quantity (packs of 100 screws)

                     $5.00                                                              0

                       4.50                                                              60

                       4.00                                                              120

                      3.50                                                               180

                      3.00                                                              240

                      2.50                                                               300

                      2.00                                                               360

                       1.50                                                               420

                       1.00                                                               480

                       0.50                                                              540

                        0.0                                                               600

Using the starting point method, what is the price elasticity of demand from a price of $4.50 to a price of $4.00 per pack of 100 screws:

The explanation of the answer is now provided as follows:

New quantity = 120

Old quantity = 60

New price = $4.00

Old price = $4.50

Using the formula for calculating the starting point method for elasticity of demand, we have:

Price elasticity of demand = ((New quantity - Old quantity) / (New price - Old price)) * (Old price / Old quantity) = ((120 - 60) / (4.00 - 4.50)) * (4.50 / 60) = -9.00

Therefore, the price elasticity of demand is -9.00.