Question

MC Qu. 39 Use the data in the table... Use the data in the table below...

MC Qu. 39 Use the data in the table...

Use the data in the table below to answer the following question.

Price Quantity Demanded
$20 12
18 17
16 20
14 24
12 30
10 36
8 40
6 44
4 48

Over which price range is the demand elastic?

Multiple Choice

  • $8-$10

  • $14-$16

  • $6-$8

  • $4-$6

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Homework Answers

Answer #1

Demand is elastic in the upper portion of the demand curve

P Q Q2-Q1 (Q2+Q1/2) PER CHANGE IN Q P2-P1 (P2+P1/2) PERC CHANGE IN P E
20 12
18 17 5 23 0.217391 -2 28 -0.07143 -3.04
16 20 3 28.5 0.105263 -2 25 -0.08 -1.32
14 24 4 34 0.117647 -2 22 -0.09091 -1.29
12 30 6 42 0.142857 -2 19 -0.10526 -1.36
10 36 6 51 0.117647 -2 16 -0.125 -0.94
8 40 4 58 0.068966 -2 13 -0.15385 -0.45
6 44 4 64 0.0625 -2 10 -0.2 -0.31
4 48 4 70 0.057143 -2 7 -0.28571 -0.20

E = percentage change in demand/Percentage change in price

E = [Q2-Q1/(Q2+Q1/2)] / [P2-P1/(P2+P1/2)]

Demand is elastic over 14 to 16

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