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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.

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.

PriceQuantity Demanded
$6396$12390
$18384$24378
$30372$36366
$42360$48354

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.

PriceQuantity Demanded
$5388$10368
$15348$20328
$25308$30288
$35268$40248

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.

PriceQuantity Demanded
$8365$16325
$24285$32245
$40205$48165
$56125$6485

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

Based on this information classify the demand curve.

Hint