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Price elasticity of demand

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Details: 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.

Use supply and demand to analyze business activities to formulate business plans

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Microeconomics: Price Elasticity of Demand

Price elasticity of demand

The price elasticity of demand is the degree of responsiveness of the demand to a change in the price. It is calculated by calculating the change in the demand in response to a change in the price of a product (Wessels, 2000). The formula for calculating the elasticity is:

Percentage change in demand / percentage change in price

In this situation, the elasticity of demand is calculated as follows:

The ...

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