Question

1. There are several ways of Finding out the price elasticity of demand (e); depending on the type of data.(a) Percentage change formula(b) Mid-point formula(c) Slope of demand: ii. Find out"using this method for the following demand curves at P= 10: A. P= 150-3:5Q

Answer 1

P	Q	a.Percentage change formula	b.Midpoint formula	c.Slope of demand
1	146.5
2	143	-0.02	-0.04	-3.5
3	139.5	-0.05	-0.06	-3.5
4	136	-0.08	-0.09	-3.5
5	132.5	-0.10	-0.12	-3.5
6	129	-0.13	-0.15	-3.5
7	125.5	-0.16	-0.18	-3.5
8	122	-0.20	-0.21	-3.5
9	118.5	-0.23	-0.25	-3.5
10	115	-0.27	-0.28	-3.5
11	111.5	-0.30	-0.32	-3.5
12	108	-0.35	-0.37	-3.5

a. The percentage change formula at price = 10

= ((115-118.5)/118.5)/((10-9)/9) = -0.27

b. Mid-Point formula at P= 10,

=((115-118.5)/(115+118.5)/2)/((10-9)/(10+9)/2) = -0.28

c. Slope of demand at P =10

=((115-118.5)/((10-9))) = -3.5