Price Elasticity of Demand
Essay specific features
Written by:
Michael T
Date added:
April 4, 2015
Level:
University
Grade:
A
No of pages / words:
4 / 1069
Was viewed:
8236 times
Rating of current essay:
Essay content:
Ms. Johnson needs to know the response of the consumers to the increased price. According to McConnell and Brue (2004), the Price Elasticity of Demand measures the rate of response of quantity demanded due to a price change (p. 1).
Using Price Elasticity of Demand
In calculating the Price Elasticity of Demand, we use the formula:
percentage change in quantity
demanded of product X
Ed = percentage change in price
of product X
The percentage change in quantity demanded is divided by the percentage change in price...
displayed 300 characters
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The equation is:
The percentage of change in quantity demanded is:
[QDemand(NEW) - QDemand(OLD)] / QDemand(OLD)
The percentage of change in price is:
[Price(NEW) - Price(OLD)] / Price(OLD)
T's Jean Shop original price for the Capri jeans was $9.00 and the new price is $10.00. So we have the Price (OLD) = $9...
displayed next 300 characters
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