Enable text based alternatives for graph display and drawing entry

Try Another Version of These Questions

Question 1

Suppose that a store decreases the price of cereal from $4 to $3.4. As a result, quantity demanded increases from 190 to 260.

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

Make sure that you include a negative sign if necessary.

 

Hint




Question 2

Suppose that a store decreases the price of peanut butter from $4.2 to $3.7. As a result, quantity demanded increases from 190 to 250.

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

 

Hint




Question 3

Suppose that a store increases the price of peanut butter from $3.5 to $4.4. As a result, quantity demanded decreases from 260 to 210.

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

Your answer should be expressed in absolute value terms.

 

Hint