Calculate the price elasticity of demand between $110 and $130.
HILLSIDE is a new School Subject. I don't think any of us have been trained in it. I never heard of it, but I'm out of it anyway, I guess.
http://en.wikipedia.org/wiki/Price_elasticity_of_demand
To calculate the price elasticity of demand, we need two pieces of information: the percentage change in quantity demanded and the percentage change in price.
The formula for price elasticity of demand is:
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
To find the percentage change in quantity demanded, use the following formula:
% Change in Quantity Demanded = ((New Quantity Demanded - Old Quantity Demanded) / Old Quantity Demanded) * 100
In this case, assuming that the old quantity demanded is $110 and the new quantity demanded is $130:
% Change in Quantity Demanded = ((130 - 110) / 110) * 100 = (20 / 110) * 100 ≈ 18.18%
Now, to find the percentage change in price:
% Change in Price = ((New Price - Old Price) / Old Price) * 100
Assuming that the old price is $110 and the new price is $130:
% Change in Price = ((130 - 110) / 110) * 100 = (20 / 110) * 100 ≈ 18.18%
Finally, substitute the values into the price elasticity of demand formula:
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
Price Elasticity of Demand = 18.18% / 18.18% = 1
The price elasticity of demand between $110 and $130 is 1.