Monday

March 30, 2015

March 30, 2015

Posted by **steve** on Friday, September 14, 2012 at 1:09pm.

- economics -
**Susan Smith**, Sunday, March 16, 2014 at 2:47pm(a) Price Elasticity of demand of widgets

= (Change in Quantity of demand X/Original Quantity of demand X) divided by (Change in price of X/Original Price of X)

Change in Quantity = 15 - 25 = -10

Original Quantity = 25

Change in Price = (7 - 5) = 2

Original Price = 7

= (-10 / 25) / (2 / 7) = - 1.4

(b) As stated by the law of demand, when the price of a goods falls, quantity demand rises. The price elasticity of demand of widgets is greater than 1 so it is relatively elastic.

(c) I Demand is elastic if a specific percentage change in price results in a larger percentage change in quantity demanded. In such cases, Ed will be greater than 1. t is elastic.

Ed= (Change in Quantity/Sum of Quantities/2) divided by (Change in price/sum of price/2)

= -10/(40/2) / -2/(12/2)

= (-10/20) / (-2/6)

= -0.5/-0.3

= 1.5

**Answer this Question**

**Related Questions**

econmics - Suppose the price of widgets rises from $7 to $9 and consumption of ...

Econ - The demand for widgets (QX) is given by the following equation: QX = 425-...

ECONOMICS - Willy’s widgets, a monopoly, faces the following demand schedule (...

economics - Willy’s widgets, a monopoly, faces the following demand schedule (...

Economics - Suppose that the equilibrium quantity in the market for widgets has ...

Econ MC - Suppose that the equilibrium price in the market for widgets is $5. If...

Calculus - A company manufactures widgets. The daily marginal cost to produce x ...

statistics - The probability any one widget is free of defects is 0.93. For ...

statistics - Three percent of the widgets produced by machine 1121 are defective...

Probability/Statistics - Please help!!! Smith Widget Company makes widgets for ...