Question

Zumba classes sell all 20 participant spots at a price of $4.50 each. When the instructor raised the prices to $5.50, 10 people attended the class. From the midpoint method, the price elasticity of demand for Zumba is:
A. 0.50.B. 3.33.C. 2.50.D. 0.20.E. 0.20

Answer 1

Answer:

Zumba classes sell all 20 participant spots at a price of $4.50 each. When the instructor raised the prices to $5.50, 10 people attended the class. From the midpoint method, the price elasticity of demand for Zumba is:

0.286

Explanation:

20 at $4.50= $90

10 at $5.50= $55

price elasticity= change in quantity demand/ change in price

20-10= 10 change in quantity demand

$90-$55= $35

10/35=0.286