I need an example of the "Price Elasticity of Demand" for my economics homework.
http://www.mackinac.org/1247
Thank you that is perfect!It gives me examples
The "Price Elasticity of Demand" measures the responsiveness of the quantity demanded of a good or service to a change in its price. To find an example, you can follow these steps:
1. Choose a specific good or service: Select a product that is commonly consumed and for which you can easily obtain price and quantity data.
2. Collect price and quantity data: Gather data on the prices and quantities of your chosen good or service. You can look for this information in market reports, government statistics, or online databases. Make sure to have data for different price levels.
3. Calculate the price elasticity of demand: Use the following formula to calculate the price elasticity of demand:
Price Elasticity of Demand = Percentage change in quantity demanded / Percentage change in price
To calculate the percentage change in quantity demanded, divide the difference in quantity demanded by the initial quantity demanded and multiply by 100. Do the same for the percentage change in price.
4. Interpret the result: Once you have calculated the price elasticity of demand, interpret the value. If the elasticity is greater than 1, demand is elastic, meaning quantity demanded is highly sensitive to changes in price. If the elasticity is less than 1, demand is inelastic, indicating that quantity demanded is not highly responsive to price changes. A value of exactly 1 suggests unit elasticity, where quantity demanded changes proportionally with price.
Remember to cite your sources and provide any assumptions made during your analysis.