# Estimation of Elasticity of Demand

Not what you're looking for?

The Olde Yogurt Factory has reduced the price of its popular Mmmm Sundae from $2.25 to $1.75. As a result, the firm's daily sales of these sundaes have increased from 1,500/day to 1,800/day. Compute the arc price elasticity of demand over this price and consumption quantity range.

I just need assistance with the consumption quantity range part.

Thank you for your assistance!

##### Purchase this Solution

##### Solution Summary

Solution explains how to estimate the elasticity of demand.

##### Solution Preview

The Price Elasticity of Demand measures the rate of response of quantity demanded due to a price change.

The formula for the Price Elasticity of Demand (PEoD) is:

PEoD = (% Change in Quantity ...

##### Purchase this Solution

##### Free BrainMass Quizzes

##### Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

##### 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.

##### Economics, Basic Concepts, Demand-Supply-Equilibrium

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

##### Basics of Economics

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