ECO 1102 Study Guide - Final Guide: Average Cost, Average Variable Cost, Deadweight Loss
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ECO 1102 Full Course Notes
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Calculate the average of the two quantities, then the average of the two prices. Calculate the change in quantity and the change in prices, where one of the changes in the negative value. Using the midpoint method, the percentage change in quantity can be calculated, and the percentage change in price, using that, calculates the ratio of the quantity by price percentage change. This is one way in calculating the price elasticity of demand. Formula for price elasticity of demand: percentage change in quantity demanded / percentage change in price. If i used the midpoint method to calculate the price: {(q2 q1)/ [(q2 + q1)/2]}/ {(p2 p1)/ [(p2 + Income elasticity of demand = percentage change in quantity demanded / percentage change in income. Cross-price elasticity of demand= percentage change in quantity demanded of good 1 / Price elasticity of supply= (percentage change in quantity supplied) / percentage change in price.