Due to the impact of Tropical Storm Harry in the Caribbean, the price of sugar rises from $0.50 to $1.00 per bag and the quantity demanded falls from 120 bags to 40 bags. a) Using your knowledge from Finite Math, show that the price-demand function is ?(?)=−?.??????+?.?? b) Calculate the elasticity of demand for sugar. c) Is sugar elastic, unitary or inelastic in this price range? (HINT: Try about 3 prices in the price-range)
Due to the impact of Tropical Storm Harry in the Caribbean, the price of sugar rises from $0.50 to $1.00 per bag and the quantity demanded falls from 120 bags to 40 bags. a) Using your knowledge from Finite Math, show that the price-demand function is ?(?)=−?.??????+?.?? b) Calculate the elasticity of demand for sugar. c) Is sugar elastic, unitary or inelastic in this price range? (HINT: Try about 3 prices in the price-range)
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 13PAE
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Due to the impact of Tropical Storm Harry in the Caribbean, the
a) Using your knowledge from Finite Math, show that the price-demand function is
?(?)=−?.??????+?.??
b) Calculate the
c) Is sugar elastic, unitary or inelastic in this price range? (HINT: Try about 3 prices in the price-range)
d) What is the interpretation of that price elasticity of demand?
e) If the price of sugar ($1.00) were to increase by 15%, what would be the percentage change in the quantity demanded?
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