Lumen OHM Assessment

Question 1

Suppose that a store decreases the price of laundry detergent from $4 to $3.9. As a result, quantity demanded increases from 210 to 270.

Using the mid-point elasticity approach, calculate price elasticity of demand.

Your answer should be expressed in absolute value terms.

Hint

Question 2

Suppose that a store decreases the price of laundry detergent from $4 to $3.7. As a result, quantity demanded increases from 210 to 240.

Based on this information classify the demand curve.

Hint

Question 3

Consider the following demand schedule for bags.

Suppose that the store increases the price of bags from $42 to $48.

Using the mid-point approach, calculate the percentage change in quantity demanded.

Make sure that you include a negative sign if necessary.

Hint

Question 4

Consider the following demand schedule for books.

Suppose that the store increases the price of books from $15 to $20.

Using the mid-point approach, calculate price elasticity of demanded.

Hint

Question 5

Consider the following demand schedule for shoes.

Suppose that the store increases the price of shoes from $8 to $16.

Based on this information classify the demand curve.

Hint