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Question 1

Suppose that a store decreases the price of laundry detergent from $4.3 to $3.6. 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 laundry detergent from $4.4 to $3.4. As a result, quantity demanded increases from 220 to 230.

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

 

Hint




Question 3

Suppose that a store increases the price of laundry detergent from $3.4 to $4. As a result, quantity demanded decreases from 230 to 190.

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

Your answer should be expressed in absolute value terms.

 

Hint