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Calculating price elasticity of demand

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ABC company has conducted a U.S market survey for their most popular brand of contact lenses, and obtained the following information. What is the elasticity of demand?

Year Population Price Average Income Eyeglass Population Number of Quantity Demanded
(millions) (adjusted (adj. for inflation) Price Vision Optometrists (millions of pairs)
for inflation) Index Index (per 100,000
population)

2004 30 10.00 $33k 100 Fair 6 3.15
2005 30 10.30 $34k 100 Good 7 3.25
2006 31 11.00 $35k 100 Good 7 3.4
2007 31 11.25 $35k 100 Good 7 3.3
2008 31 11.40 $36k 100 Good 8 3.55

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The solution describes the steps to calculate price elasticity of demand.

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Year Population Price Average Income Eyeglass Population Number of Quantity Demanded
(millions) (adjusted (adj. for inflation) Price Vision Optometrists (millions of pairs)
...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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