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Estimating the price elasticity coefficients

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Using the midpoints formula, calculate the elasticity coefficient for each price level, starting with the coefficient for the

Price Quantity Total Elasticity Elastic or
Demanded Revenue Coefficient Inelastic

$4 100 $400.00 XXXX XXXX
6 80 $480.00 __________ __________
8 60 $480.00 __________ __________
10 40 $400.00 __________ __________
12 20 $240.00 __________ __________
14 1 $14.00 __________ __________

For each coefficient, indicate what type of elasticity is indicated, elastic demand, inelastic demand, or unitary demand.

Explain how the elasticity changes as price increases. Why is this happening?

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Solution Summary

The solution describes the steps to calculate price elasticity coefficients with the help of mid point formula. It also analyzes how the elasticity varies with price.

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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