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# Answer to Question #97291 in Microeconomics for ABU

Question #97291
.) The following data refer to quantity of sweets demanded by students in given school.
Price (Kshs) Quantity demanded
1 100

1.10 80

Required:
i) Calculate the price elasticity of demand considering a price increase form Ksh. 1.00 to Ksh. 1.10.
(3.5 marks)
ii) Calculate the price elasticity of demand when price decreases from Ksh. 1.10 to Ksh. 1.00. (3.5 marks)
1
2019-10-29T09:56:43-0400

Solution:

Calculate the price elasticity of demand considering a price increase form Ksh. 1.00 to Ksh. 1.10.

Q2=80, Q1=100, p2=1.10, p1=1.00

"E= (Q2-Q1)\/(p2-p1)\\times (p2+p1)\/(Q2+Q1)"

"E= (80-100)\/(1.10-1.00) \\times(1.10+1.00)\/(80+100)\u2248-2.33"

Calculate the price elasticity of demand when price decreases from Ksh. 1.10 to Ksh. 1.00.

Q2=100, Q1=80, p2=1.00, p1=1.10

"E= (100-80)\/(1.00-1.10)\\times (1.00+1.10)\/(80+100)\u2248-2,33"

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