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October 1, 2014

October 1, 2014

Posted by **Mike** on Friday, October 16, 2009 at 11:45pm.

"Assume the price elasticity of demand for U.S. Frisbee. frisbees is -0.6. If the company increases the price of each frisbee from $6 to $8, the number of frisbees sold will:"

The answer is: Decrease by 17.1 percent

What I would like to know is how she got to this answer? I have been trying every formula I can think of and nothing is working.

Thanks!

Mike

- Economics -
**economyst**, Saturday, October 17, 2009 at 11:43amYour prof used the mid-point method for calculating percentage change.

Price changed by 2 from 6 to 8. Calculate the pct change from the mid-point. i.e., 2/7 = .2857

.2867 * 0.6 = .1714

QED

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