HW Score: 51.67%, 15.5 of 30 pts E Question Help Assumng that the demand curve f
ID: 1162295 • Letter: H
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HW Score: 51.67%, 15.5 of 30 pts E Question Help Assumng that the demand curve for places in the treshmen dass at Pace dd not shift between End of Chapter 1.8 In fall 2006, Pace University in New York raised its annual tuition from $24,250 to $29.400 Freshman enrallment declined trom 1,450 in fall 2005 to 1,100 in fal 2006 2005 and 2006, use this information to calculate the price elasticty.ot demand Use the midpoint formula in your cakculation Source: Karen W. Arenson, "At Universities, Plum Post at Top Is Now Shaky. New York Times, January 9. 2007 The price elasticity of demand for Pace University for the fall f 2006 is(Hint include the negative sign and enter your respanse rounded to two decimal places.) Clear All 4 7/2018 O Type here to searchExplanation / Answer
Year
Annual Tuition
(Price)
Student Enrollment
(Quantity)
2005
24,250
1,450
2006
29,400
1,100
Change( ?)
24,250 – 29,400
=-5,150
1,450 – 1,100
= 350
Using the midpoint formula
Elasticity= ?Q/?P x P1+P2/Q1+Q2
Elasticity= 350/-5,150 x 24,250+29,400/1,450+1,100
Elasticity = 0.0679 x 21.039
Elasticity = -1.42 or 1.42 (in absolute value)
Price
Quantity
20
20
16
28
As shown in the diagram
Change( ?)
20 – 16 = 4
20 – 28 = -8
Using the midpoint formula
Elasticity= ?Q/?P x P1+P2/Q1+Q2
Elasticity= -8/4 x 20+16/20+28
Elasticity= -8/4 x 36/48 = -1.5 or 1.5 (in absolute value)
Year
Annual Tuition
(Price)
Student Enrollment
(Quantity)
2005
24,250
1,450
2006
29,400
1,100
Change( ?)
24,250 – 29,400
=-5,150
1,450 – 1,100
= 350
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