Exercise on Calculating the Elasticity: Solutions
Questions: Based on the following information, calculate the elasticity of demand for jetskis:
If P = $50, Qd = 4000
If P = $60, Qd = 2500
Solutions:
- Let's use the midpoint to calculate the percentage (%) change in Qd:
(4000 − 2500) / (3250) × 100% = 46.15%
- Percentage change in P
($60 − $50) / ($55) × 100% = 18.18%
- The price elasticity of demand would be:
46.15% / 18.18% = 2.5
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Date of last modification: 2019