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Elasticity of Demand

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The following is a straight-line demand curve:

Price Quantity Demanded

$12 1
10 2
8 3
6 4
4 5

a) Calculate the elasticity of demand in going from 2 unit to 3 units.

b) Is the demand elastic or inelastic in this range

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Solution Preview

(a) Change in q = 3 - 2 = 1

Average q = (2 + 3)/2 = 2.5

Change in p ...

Solution Summary

The elasticity of demand going from two units to three units is determined. The demand elastic and inelastic in the range is given. A complete, neat and step-by-step solution is provided in the attached file.

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