2. Calculating the price elasticity of demand - A step-by-stepguide Suppose that

Question

2. Calculating the price elasticity of demand - A step-by-stepguide

Suppose that during the past year, the price of a laptop computer fell from $2,350 to $1,930. During the same time period, consumer sales increased from 436,000 to 537,000 laptops.

Calculate the elasticity of demand between these two price

2. Calculating the price elasticity of demand - A step-by-stepguide

Suppose that during the past year, the price of a laptop computer fell from $2,350 to $1,930. During the same time period, consumer sales increased from 436,000 to 537,000 laptops.

Calculate the elasticity of demand between these two price

Explanation / Answer

Elasticity = % change in quantity / % change in price
= 20.76% / -19.63%
= -1.0577
= -1.06

Original New Average Change % Change Quantity 436000 537000 486500 101000 20.76% Price $ 2,350 $ 1,930 $ 2,140 $ -420 -19.63%

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