mjb08a_M51_RETURNED

# mjb08a_M51_RETURNED - Price Elasticity of Demand...

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Unformatted text preview: Price Elasticity of Demand Calculator ((Q1 - Q0) / (Q1 + Q0) / 2) = Change in Quantity Elasticity 360 280 360 280 2 = 0.25 = 0.81 inelastic ((P1 - P0) / (P1 + P0) / 2) = Change in Price \$11.00 \$15.00 \$11.00 \$15.00 2 =-0.31 Definitions Elastic- when a given percentage price change leads to a larger percentage change in quantity demanded i.e. > 1 Inelastic- when a given percentage price change leads to a smaller percentage change in quantity demanded i.e. < 1 Unit Elasticity- when a given percentage change leads to the same percentage change in quantity demanded i.e. = 1 Cross Elasticity of Demand Calculator ((Weiners 1 - Weiners 0) / (Weiners 1 + Weiners 0) / 2) = Change in Quantity Elasticity 4000 5000 4000 5000 2 =-0.22 =-0.44 ((Buns 1 - Buns 0) / (Buns 1 + Buns 0) / 2) = Change in Price \$5.00 \$3.00 \$5.00 \$3.00 2 = 0.5 Definitions Negative Cross Elasticity- Goods are compliments Positive Cross Elasticity- Goods are substitutes Compliments- Two goods are called compliments if an increase in the quantity consumed of one good increases the quantity demanded of the other.- Two goods are called compliments if an increase in the quantity consumed of one good increases the quantity demanded of the other....
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mjb08a_M51_RETURNED - Price Elasticity of Demand...

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