Column I - determine the Price-Elasticity of Demand Coefficient. Refer to the Pr
ID: 1095574 • Letter: C
Question
Column I - determine the Price-Elasticity of Demand Coefficient.
Refer to the Price-Elasticity Coefficient and Formula : Ep = (Change in quantity demanded / sum of quantities demanded / 2) / (change in price / sum of prices / 2)
The data in the first four columns represent price (P) and quantity demanded (Qd) in time 1 (before a change in price) and time 2 (after a change in price) for a specific good. ** Note that for full credit, the coefficient results must be expressed in absolute terms. For example, -1 should be expressed as |1|
Column II - Interpret the results and indicate the type of elasticity which applies (such as Elastic, Inelastic, Perfectly Elastic, Perfectly Inelastic, Unitary) based on how the quantity demanded changed subsequent to a change in price.
Column III - Determine if the good in question would be considered a necessity, a luxury or neither.
Column IV - Indicate, in monetary terms and including the applicable currency symbol ($,etc.), how much is the change in total revenue (TR = P X QD), or total expenditure from the first price level to the second.
Column V - indicate the direction of the change, that is, increasing or decreasing (show upward facing arrow for increasing and show downward facing arrow for decreasing).
Column I - determine the Price-Elasticity of Demand Coefficient. Refer to the Price-Elasticity Coefficient and Formula : Ep = (Change in quantity demanded / sum of quantities demanded / 2) / (change in price / sum of prices / 2) The data in the first four columns represent price (P) and quantity demanded (Qd) in time 1 (before a change in price) and time 2 (after a change in price) for a specific good. ** Note that for full credit, the coefficient results must be expressed in absolute terms. For example, -1 should be expressed as |1| Column II - Interpret the results and indicate the type of elasticity which applies (such as Elastic, Inelastic, Perfectly Elastic, Perfectly Inelastic, Unitary) based on how the quantity demanded changed subsequent to a change in price. Column III - Determine if the good in question would be considered a necessity, a luxury or neither. Column IV - Indicate, in monetary terms and including the applicable currency symbol ($,etc.), how much is the change in total revenue (TR = P X QD), or total expenditure from the first price level to the second. Column V - indicate the direction of the change, that is, increasing or decreasing (show upward facing arrow for increasing and show downward facing arrow for decreasing).Explanation / Answer
P1 P2 Q1 Q2 1 2 3 4 5 1 1 2 10 5 225 Elastic Necessity 0 DOWN 2 4 3 60 100 44800 Perfectly Elastic Necessity -60 DOWN 3 12 20 100 100 0 Perfectly Inelastic Niether -800 DOWN 4 3 2 7 7 0 Perfectly Inelastic Niether 7 UP 5 0.3 1.2 20 15 291.6667 Elastic Necessity -12 DOWN 6 1.5 2.75 7 5.5 63.75 Elastic Necessity -4.625 DOWN 7 3.5 2.125 20 15 715.9091 Elastic Luxury 38.125 UP 8 5 5 1000000 0 1E+21 Perfectly Elastic Necessity 5000000 UP 9 5 5 10 1E+09 1E+29 Perfectly Elastic Necessity -5E+09 DOWN 10 12 24 24 12 1296 Elastic Necessity 0 DOWN 11 13 26 260 130 152100 Perfectly Elastic Necessity 0 DOWN 12 7 16 32 24 1144.889 Elastic Necessity -160 DOWN 13 7 16 78 78 0 Perfectly Inelastic Niether -702 DOWN 14 39 52 117 104 20111 Perfectly Elastic Necessity -845 DOWN 15 65 91 1300 780 6489600 Perfectly Elastic Necessity 13520 UP 16 4 5 13 7 1080 Elastic Necessity 17 UP 17 7 4 16 24 1173.333 Elastic Necessity 16 UP 18 143 273 520 390 378560 Perfectly Elastic Necessity -32110 DOWN 19 78 91 780 780 0 Perfectly Inelastic Niether -10140 DOWN 20 91 78 780 780 0 Perfectly Inelastic Niether 10140 UP