Calculate the absolute value of the price elasticity of demand for a for a fall

Question

Calculate the absolute value of the price elasticity of demand for a for a fall in price from $9 to $8 (which is associated with a rise in the quantity demanded from 2 to 3): Price elasticity of demand = Calculate the absolute value of the price elasticity of demand for a rise in price from $8 to $9 (which is associated with a fall in the quantity demanded from 3 to 2): Price elasticity of demand = Using the mid-point method, calculate the absolute value of the price elasticity of demand between $8 and $9: Price elasticity of demand = Using the mid-point, is demand elastic or inelastic over this range? As price falls, is marginal revenue positive or negative?

Explanation / Answer

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Price of TV Quantity of TV Purchased % change in Price (A) % change in Qty demanded (B) Absolute Elasticity = B/A 9 2 -11.11 50 4.5 8 3

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