68 403
Assignments Done
98,5%
Successfully Done
In December 2018

# Answer to Question #73982 in Macroeconomics for Jahanzaib

Question #73982
1. For each of the following cases, calculate the arcprice elasticity of demand, and state whether demandis elastic, inelastic, or unit elastic.
a. When the price of milk increases from $2.25 to$2.50 per gallon, the quantity demanded fallsfrom 100 gallons to 90 gallons.
Arc price elasticity of demand = % change in Q / % change in
P = [(90 - 100)/100] / [(2.50 - 2.25)/2.25] = - (1/10)/(1/9) = - 0 .9 i.e Inelastic

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!