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    Market Systems

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    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.

    3. explain your reasoning and interpret your results.

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    https://brainmass.com/economics/microeconomics/market-systems-307505

    Solution Preview

    1. Price elasticity of demand = Percentage change in quantity demanded/percent change in price
    =((20-35)35)/((3.50-3.00)/3.50)
    ...

    Solution Summary

    The solution goes into a great amount of detail regarding the question being asked. Step by step explanation is provided for each part of the question which makes it very easy to follow along for anyone with just a basic understanding of the concepts. Overall, an excellent response to the question being asked.

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