Economics05 marksNumerical: price elasticity of demandPrice elasticity measurement by arc method
Price Elasticity of Demand Problem Suppose a demand schedule is given as below: | Price | 100 | 80 | 60 | 40 | 20 | 0 | |-------|-----|-----|-----|-----|-----|-----| | Quantity Demanded | 100 | 200 | 300 | 400 | 500 | 600 | a. Calculate elasticity for fall in price from Rs. 80 to Rs. 60. b. Calculat
Price Elasticity of Demand Problem
Suppose a demand schedule is given as below:
| Price | 100 | 80 | 60 | 40 | 20 | 0 |
|---|---|---|---|---|---|---|
| Quantity Demanded | 100 | 200 | 300 | 400 | 500 | 600 |
a. Calculate elasticity for fall in price from Rs. 80 to Rs. 60.
b. Calculate elasticity for the increase in price from Rs. 60 to Rs. 80.
c. Why is the elasticity coefficient in part a) different from that in b)?
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Price (Rs.) 100 80 60 40 20 0 --------------------- Quantity Demanded 100 200 300 400 500 600 Relevant points: - At $P = 80$, $Q = 200$ - At $P = 60$, $Q = 300$ The question asks separately for elasticity of a fall (80 → 60) and a rise (60 → 80), and then asks why they differ. This phrasing signa...