2. Using the following information about Post It Notes to answer the questions b

Question

2. Using the following information about Post It Notes to answer the questions below:

The price of a package of 100 Post It Notes rises from $0.50 to $1.00. Total revenue from the sale of Post It Notes falls from $100.00 to $80.00.

a. How many packages of Post It Notes were demanded when they were $0.50 and $1.00, respectively?

b. What is the percentage change in the price of a bottle of Post It Notes (to three significant digits)?

c. What is the elasticity of demand for a package of Post It Notes?

-I'm really bad with elasticity and percent change. Don't know how to solve.

Explanation / Answer

A. When the packages were 50 cents 200 were sold(200*.5=100). When the price was $1 80 packs were sold (1*80=80) B. The percent change in price of a pack of post it notes was 100% (100-50/50) C. Elasticity of demand=1.5 (%change in Q/%change P)

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