Business, 28.01.2020 19:44, lafuiciosa10

In response to a change in the price of good x from $10 to $6, the quantity demanded of good x increases from 100 to 150 units. what is the price elasticity of demand for good x? (use the midpoint formula and express as a decimal - e. g. 0.2)

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answered: kenneditomejia

- 0.80

Explanation:

Price elasticity of demand describes the extent to which the quantity demanded of good X changes as result of a change in its own price.

The midpoint formula for price elasticity of demand is presented and used as follows:

Percentage change in quantity = %ΔQ = [Q2 - Q1] / [(Q2 + Q1) ÷ 2] × 100

Percentage change in quantity = %ΔP = [P2 - P1] / [(P2 + P1) ÷ 2] × 100

Midpoint price elasticity of demand = %ΔQ / %ΔP

Where:

Q2 = New quantity of good X = 150

Q1 = Initial quantity of good X = 100

P2 = New price of good X = $6

P1 = Initial price of good X = $10

Therefore,

Percentage change in quantity = %ΔQ = [150 - 100] / [(150 + 100) ÷ 2] × 100

= [50/(250 ÷ 2)] × 100

= (50/125) × 100

= 40.00%

Percentage change in quantity = %ΔP = [$6 - $10] / [($6 + $10) ÷ 2] × 100

= [-$4/($16 ÷ $2)] × 100

= (-$4/$8) × 100

= - 50.00%

Price elasticity of demand = 40% / 50% = - 0.80

The elasticity of demand of -0.80 less than 1. That indicate that the quantity demand is inelastic. That is the change in the degree of change in the quantity demanded of good X is lower than the degree of change in its price.

answered: Guest

Yikes. that sucks dide

answered: Guest

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

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In response to a change in the price of good x from $10 to $6, the quantity demanded of good x incre...