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lubasha [3.4K]
3 years ago
13

Suppose that a demand curve exhibits two points. Initially, at price P 0 , the quantity demanded is Q 0 . When price changes to

P 1 , quantity demanded is Q 1 . Move the components of the midpoint formula for elasticity of demand to their correct positions.
Business
1 answer:
dsp733 years ago
4 0

Answer and Explanation:

The formula to compute the price elasticity of demand is as follows:

= Percentage change in quantity demanded ÷ percentage change in price

At Price P0, the Quantity demanded is Q0

And,

At Price P1, the Quantity Demanded is Q1

Just like this, it could be computed

\frac{Q_1 - Q_0}{(Q_1 + Q_0)/2} divided by \frac{P_1 - P_0}{(P_1 + P_0)/2}

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Answer:

  1. Contain Yourself!, a plastic container company, raises the price of its signature Lunchbox container from $3.00 to $4.00 . As a result, the quantity sold drops from 20,000 to 15,000 = unit elastic
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Explanation:

  1. The demand for unit elasticity is an intermediate situation between an elastic and an inelastic demand curve, in which the price elasticity is equal to one, which means that given variations in the price, the total income does not change (price per quantity). Eslasticity=1
  2. Demand is inelastic when the percentage variation of the quantity demanded is less than the percentage variation of the price. Elasticity less than 1
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