Question

You observed that, when plastic parts are being sold at $10 per batch the sales volume...

You observed that, when plastic parts are being sold at $10 per batch the sales volume hovers around 2,000 batches, but at $15 per batch the volume drops to 500 batches.

The elasticity of demand for the plastic parts is ___________

Is it elastic (yes or no?) ________

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Answer #1

1.It is Relatively Elasticity of  Demand.

Relatively elastic demand refers to the demand when the proportionate change produced in demand is greater than the proportionate change in price of a product. The numerical value of relatively elastic demand ranges between one to infinity.

Mathematically, relatively elastic demand is known as more than unit elastic demand (ep>1). For example, if the price of a product increases by 50% and the demand of the product decreases by 75%, then the demand would be relatively elastic.

2.yes,it is elastic

Relatively Elasticity of  Demand

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