Take a look at Figure 19-2. Work out the calculation for the price elasticity of demand between prices of $ 11 per reservation and $ 10 per reservation to prove that the value is 21.
the price elasticity of demand is
Price elasticity of demand estimates how much the interest for the ware changes with one unit change in the cost of the item.
We know price elasticity demand is
Q is the quantity of the demanded goods and P is the price
Hence the price elasticity of demand is
It is very difficult to find goods with perfectly elastic or perfectly inelastic demand. We can, however, find goods that lie near these extremes. Characterize demands for the following goods as being near perfectly elastic or near perfectly inelastic.
a. Corn grown and harvested by a small farmer in Iowa
b. Heroin for a drug addict
c. Water for a desert hiker
d. One of several optional textbooks in a pass-fail course
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