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# Price Elasticity of Demand: Elastic, Inelastic & Unitary

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Details: You are a painter, and the price of a gallon of paint increases from \$3.00 a gallon to \$3.50 a gallon. Your usage of paint drops from 35 gallons a month to 20 gallons a month. Perform the following:

1.Compute the price elasticity of demand for paint and show your calculations.
2.Decide whether the demand for paint is elastic, unitary elastic, or inelastic.

2â?"3-page Word document

https://brainmass.com/economics/elasticity/price-elasticity-of-demand-elastic-inelastic-unitary-376541

#### Solution Preview

Hello Student,

First, let me start by giving you a brief overview of elasticity of demand; after which I will seek to assist you with how to answer questions posted.

Overview of Elasticity

Elasticity may be defined as a measure of responsiveness which tells us how a dependent variable such as quantity responds to a change in an independent variable such as price. It is categorized as a cause-and-effect relationship in economics (in which you ask the question, 'if one thing happens, how will it affect something else') and can be applied to income, the quantity of a product supplied by a firm, or to demand.

In the case of demand, what you will consider is whether a given ...

#### Solution Summary

This solution gives an overview of the price elasticty of demand. It explains and shows how to calculate elastic, inelastic and unitary demand; in addition it also tells how to determine whether demand for a good is elastic, inelastic or unitary elastic. Interpretation of results is also given. The solution is adequately referenced.

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