Posted by Michelle on .
Suppose 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 gallon a month to 20 gallons a month.
Perform the following
Compute the price elasticity of demand for paint and show your calculations.
Decide whether the demand for paint is elastic, unitary elastic, or inelastic.
Explain your reasoning and interpret your results.