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B.
A.
B.
Ed =
1.
2.
3.
Remember:
what is being
compared are the percentage
changes not the absolute changes.
That is because the absolute
changes depend on the choice of
units (a change in price of a
$10,000 car by $1 is very
different from a change in price
of $10 shirt by $1.
8
4.
5.
11
12
13
Ed =
or
Ed =
1 2
(1+2)/2
12
(1+2)/2
(1+2)/2
(1+2)/2
14
15
2.
QUANTITY
DEMANDED
ELASTICITY
COEFFICIENT
CHARACTER OF
DEMAND
$1.00
300
.90
400
.80
500
.70
600
.60
700
.50
800
.40
900
16
PRICE
QUANTITY DEMANDED
$5
5
17
18
A.
19
2.
21
22
PART 2:
TOTAL REVENUE AND
ELASTICITY
23
25
4.
5.
3.
4.
28
29
30
1.
31
3.
32
33
PART 3:
PRICE ELASTICITY OF
SUPPLY
34
A.
Es =
35
B.
36
1.
37
2.
38
3.
39
A.
EXY =
1.
2.
3.
1.
Income elasticity
the percentage
demanded that
percentage change
Ei=
of demand refers to
change in quantity
results from some
in consumer incomes.