Writing 2_Week 3 - percent change in quantity demanded?...

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Writing Assessment 2 Week 3 In a local market, the monthly price of Internet access service decreases from $20 to $10, and the total quantity of monthly accounts across all Internet providers increases from 100,000 to 200,000. A) What is the price elasticity of demand? B) Is demand elastic, unit-elastic, or inelastic? C) If the Internet access providers wanted to increase price by 5%, what will be the
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Unformatted text preview: percent change in quantity demanded? Answers: A) |[(200,000 – 100,000) / (300,000/2)] / [(10 – 20) / (30/2)]| = 1 The price elasticity of demand is 1 B) Demand is unit-elastic C) Because the demand is unit-elastic, if the Internet access providers wants to increase price by 5%, then the percent change in quantity demanded will 5% too....
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This note was uploaded on 02/28/2012 for the course ECON EC311 taught by Professor Zahid during the Spring '12 term at ITT Tech San Dimas.

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