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    Price Elasticity

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    Where Q=number of lunches served and P=price n cents. Compute the point elasticity of demand for school lunches at a price of 40 cents per lunch.

    a = -1.78

    b= -.078

    c = -262.7

    d = 1.78

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    Solution Preview

    Computing price elasticity requires historic data of both price and demand. I suspect some background information was omitted from your question, but the formula is as follows:

    PE = [(Q2-Q1) / ((Q1+Q2) / 2 )] / ...

    Solution Summary

    This solution contains step-by-step calculations to determine the price elasticity of demand for school lunches.