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ECON 1 Lecture Notes - Lecture 9: Toothpaste, Unit

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School
Irvine Valley College
Department
Economics
Course
ECON 1
Professor
Collinson

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Document Summary

Sult in a decrease in the quantity purchases. Simply inelastic or relatively inelastic- consumer products ( toothpaste or other consumer products) pay much less attention to price changes. % change is now /. 50 or 22 % and change in quantity is 10/15 or 67 %. Page 20: elastic demand: a specific percentage change in price results in a larger percentage change in quantity demanded. 02: unit elasticity a % change in price an the resulting % change in quantity demanded are the same. A 2% drop in the price results i n2 % increase in demand. 02: the total revenue test (tr) the total amount the seller receives from the sale of a product in a particular time period. It is calculated by multiplying the price times the. Quantity demanded: tr= price (p) x quantity (q, elastic demand if demand is elastic a decrease in price will increase total revenue.

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Related Questions

Determine the price elasticity of demand at each quantity demanded using the arc or midpoint formula: Percentage change in quantity demanded =(Q2-Q1)/Q1 divided by percentage change in price= (P2-P1)/P1.

Redo the exercise using price changes of $10 rather than $5.

a. Determine the price elasticity of demand at each quantity demanded using the arc or midpoint formula: Percentage change in quantity demanded =(Q2-Q1)/Q1 divided by percentage change in price= (P2-P1)/P1.

b. Redo exercise using price changes of $10 rather than $5.

Ā 

Suppose that during the past year, the price of a laptop computer fell from $2,950 to $2,450. During the same time period, consumer sales increased from 430,000 to 619,000 laptops. Calculate the elasticity of demand between these two priceā€“quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign.) Original New Average Change Percentage Change Quantity 36.03% Price -18.52% Step 1: Fill in the appropriate values for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and the new quantity, and then dividing by two. Do the same for the average price. Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the change in price. Step 4: Calculate the percentage change in quantity demanded by dividing the change in quantity by the average quantity. Do the same to calculate the percentage change in price. Step 5: Calculate the price elasticity of demand by dividing the percentage change in quantity demanded by the percentage change in price, ignoring the negative sign. Using the midpoint method, the elasticity of demand for laptops is about .