Elasticity / Revenue worksheetPrice Elasticity of Demand PRICE ELASTICITY OF DEMAND =percentage change indemandpercentage change in priceUse the formula above to calculate values of Price Elasticity for all the situations below:PriceQuantity% change in quantitydemanded% change inpricePrice Elasticity ofDemandInitialNewInitialNew253010040-60% 20% 1. ___3________407012090-25% 75% 2. ___1/3________2002208064-20%10% 3. _____2______5075150135-10% 50% 4. _____1/5______In each case identify whether you would describe it as elastic/ unit elastic/ inelastic1. _________Elastic________________2. ________Inelastic_________________3. ____________Elastic_____________4. ____________Inelastic_____________Changes in RevenueTo see the effect that elasticity has on total revenue fill in the table below:PriceQuantityRevenueChange inRevenueInitialNewInitialNewBefore pricechangeAfter pricechange2530100402500 1200 1. ______-1300_____4070120904800 6300 2. ____1500_______200210806416000 13440 3. ___-2560________50751501357500 10125 4. __2625_________What determines E L A S T I C I T Y?As we have seen above it is important to a company to have an idea of the value of the elasticity of demand of its good or service as it will affect what happens to their total revenue as price changes.