54 535
Assignments Done
98,4%
Successfully Done
In November 2017
Your physics homework can be a real challenge, and the due date can be really close — feel free to use our assistance and get the desired result.
Be sure that math assignments completed by our experts will be error-free and done according to your instructions specified in the submitted order form.
Our experts will gladly share their knowledge and help you with programming homework. Keep up with the world’s newest programming trends.

Answer on Economics of Enterprise Question for Tammie Kish

Question #25714
The price of a laptop increases by 20% and there is a 40% drop in the quantity demanded, the price of a pack of cigarettes increases by 10% and there is a 5% drop in the quantity demanded, which of the two are more elastic and which is least elastic? and Why?
Expert's answer
The correct answer would be reversed.  The formula to calculate Price Elasticity of Demand is:
PEoD = (% Change in Quantity Demanded) / (% Change in Price)

Therefore:
Laptops = -40% / 20%  =  -2  =  2  =  Elastic
Cigarettes  =  -5% / 10%  =  -0.5  =  0.5  =  Inelastic

PEoD Value = 0 = perfectly inelastic
PEoD Value = 0 > v < 1 = inelastic
PEoD Value = 1 = unit elastic
PEoD Value = > 1 = elastic

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

Assignment Expert
01.12.2014 10:58

Dear Derek, thank you for fixing us. The answer was corrected.

Derek
28.11.2014 20:12

The correct answer would be reversed. The formula to calculate Price Elasticity of Demand is:

PEoD = (% Change in Quantity Demanded) / (% Change in Price)

Therefore:

Laptops = -40% / 20% = -2 = 2 = Elastic
Cigarettes = -5% / 10% = -0.5 = 0.5 = Inelastic

PEoD Value = 0 = perfectly inelastic
PEoD Value = 0 > v < 1 = inelastic
PEoD Value = 1 = unit elastic
PEoD Value = > 1 = elastic

Leave a comment

Ask Your question