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Price Elasticity of Demand

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Graph the accompanying demand data, and then use the midpoint formula for Elasticity demand to determine price elasticity of demand for each of the four possible $1.00 price changes. What can you conclude about the relationship between the slope of a curve and it's elasticity? Explain in a non technical way why demand is elastic in the northwest, and the segment of the demand curve and inelastic in the southeast segment.

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Solution Summary

The solution determines the price elasticity of demand using the midpoint formula for Elasticity demand and explains the relationship between the slope of a curve and it's elasticity.

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