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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 Summary

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

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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 )] / ...

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