Answer to Question #5229 in Microeconomics for petbcp
(i) Calculate the price elasticity of demand if a 0.2 per cent change in price of a product results in a
0.1 per cent change in quantity demanded. Indicate whether this demand is elastic, inelastic, or
unit-elastic. Provide an example of such a product.
(ii) Calculate the price elasticity of demand when the price of a good rise from $4.50 to $8.00 and
the quantity demanded changes from 150 units to 75 units. Indicate whether demand is elastic,
inelastic, or unit-elastic.