8.5 Average visits per week equal 640 when the copayment is $40 and 360 when the copayment is $60.
a. Calculate the percentage change in visits, percentage change in price, and price elasticity of demand using 640 and $40 as the denominators for percentage change calculations.
b. Calculate the percentage change in visits, percentage change in price, and price elasticity of demand using 360 and $60 as the denominators for percentage change calculations.
c. Calculate the percentage change in visits, percentage change in price, and price elasticity of demand using 500 and $50 as the denominator for percentage change calculations. (This calculation finds the arc elasticity.)
d. How do your answers differ?
8.6 Sales are 3,100 at a price of $200 and 2,400 at a price of $300. Calculate the price elasticities of demand using $200 as the base value; then use $300 as the base value. Calculate the arc price elasticity and compare the three calculations. How do your answers differ?
8.5 Average visits per week equal 640 when the copayment is $40 and 360 when the copayment is $60.
a. Calculate the percentage change in visits, percentage change in price, and price elasticity of demand using 640 and $40 as the denominators for percentage change calculations.
b. Calculate the percentage change in visits, percentage change in price, and price elasticity of demand using 360 and $60 as the denominators for percentage change calculations.
c. Calculate the percentage change in visits, percentage change in price, and price elasticity of demand using 500 and $50 as the denominator for percentage change calculations. (This calculation finds the arc elasticity.)
d. How do your answers differ?
8.6 Sales are 3,100 at a price of $200 and 2,400 at a price of $300. Calculate the price elasticities of demand using $200 as the base value; then use $300 as the base value. Calculate the arc price elasticity and compare the three calculations. How do your answers differ?