The price of a package of Reese's Peanut Butter Cups rises from $1.00 to $1.25. As a result, the weekly quantity of Reese's demanded falls from 10,000 to 9,000 packages. Calculate the price elasticity of demand using the average of the initial and new prices and quantities as the basis for figuring the percentage changes.

The price of a package of Reese's Peanut Butter Cups rises from $1.00 to $1.25. As a result, the weekly quantity of Reese's demanded falls from 10,000 to 9,000 packages. Calculate the price elasticity of demand using the average of the initial and new prices and quantities as the basis for figuring the percentage changes.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 34P: The equation for a demand curve is P=2/Q. What is the elasticity of demand as price falls from 5 to...

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