Calculating arc price elasticity of demand
Arc Price Elasticity. Assume that amazon.com cut the price on a 1.10 ct Princess Cut Diamond Solitaire engagement ring from $4,500 to $2,500, and sales rose from 50 to 75 units per week.
A. Calculate the implied arc price elasticity of demand.
B. Is a further price decrease warranted? Why or why not?
https://brainmass.com/economics/elasticity/calculating-arc-price-elasticity-demand-358380
Solution Preview
Please refer attached file for missing formulas.
A. Calculate the implied arc price elasticity of demand.
Initial Price=P1=$4500
Final Price=P2=$2500
Initial Quantity demanded=Q1=50
Final Quantity ...
Solution Summary
Solution describes the steps to calculate arc price elasticity of demand.
$2.19