Determine price elasticity of demand
Quantity Price Elasticity
Demanded
100 $ 5
80 $10
60 $15
40 $20
20 $25
10 $30
1. Determine
the price elasticity of demand at each quantity demanded using the formula %
chg in QD divided by % chg in price.
2. Redo #1
using price changes of $10 rather than $5
3. Plot the
price and quantity data given in demand schedule
4. Indicate
the price elasticity value at each quantity demanded
5. Explain
why the elasticity value gets smaller as you move down the demand curve
6. Plot the
total revenue curve directly below the demand curve measuring total revenue on
vertical and quantity on horizontal.
7. Using the
demand curve, illustrate what would occur if the income elasticity of demand
was.05, and income rose by 10 percent.
8. What
would occur if the income elasticity of demand was 3 and income rose by 10%?
