Purchase Solution

Elasticity

Not what you're looking for?

Ask Custom Question

Suppose the price of apples rises from $3.50 a pound to $4.00 and your consumption of apples drops from 30 pounds of apples a month to 20 pounds of apples. Calculate your price elasticity of demand of apples. What can you say about your price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic? Be sure to show the work you used to support your answer.

1.a. State clearly below the formula(s) you have applied in order to calculate the elasticity (calculation is not the same as formula)?. (15 points)

1. b. Draw up table showing breakdown of data/calculations/results on the basis of which you arrived at your decision in 1c. (20 points)

1.c. What is your conclusion regarding whether the demand is elastic/inelastic/unit elastic? Explain your answer and define terms relevant to elasticity used in your explanation. (20 points)

Purchase this Solution

Solution Summary

A Complete, Neat and Step-by-step Solution is provided in the attached file.

Purchase this Solution


Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.