Price elasticity of demand formula: ED= Q2 - Q1/(Q2 + Q1)/2 divided by P2 - P1/(P2 + P1)/2  (remember that price elasticity measures how the price change of a good effects the demand for that good) Solve the following problem: A local grocer charges $4 each for watermelons, and sold 200 that week. The following week she raised the price to $6 each and only sold 75. Provide your answer, and indicate if your number showed elasticity, unitary elasticity, or was inelastic.

The market price for a bulgogi was $3.00. However, it is now $6.00. Use the midpoint method to a) calculate the price elasticity of demand (na) for bulgogi. b) c) increases by 20%, how much will the quantity demanded change by? How sensitive is the quantity demanded for bulgogi to price changes? Please explain briefly. For this question use the price elasticity of demand calculated in part (a). If the price of bulgogi

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Scott has a Hotdog stand in downtown Portland. He wants to increase his total revenue. He knows that, when hotdogs are $1.25, he sells 20 an hour, and when he lowers the price to $1, he sells 35 an hour.   Calculate the price elasticity of demand for Scott's  hotdogs using the midpoint formula. (show the formula and your calculations). Is demand elastic or inelastic? How do you know? Using the price elasticity of demand calculated in section A, explain whether he should raise or lower the price to generate more revenue.

Suppose that in a week the price of spaghetti sauce increases from $5.00 to $5.50 per jar. At the same time, the quantity of spaghetti sauce demanded at a typical grocery store decreases from 10,000 to 8,500 jars per week. What is the price elasticity of demand for spaghetti sauce? Instructions: Round your response to one decimal place. -1.7

Jose owns a donut business in Los Angeles, and he wants to increase his total revenue. He knows that, when donuts are $1, he sells 200 an hour, and when he lowers the price to $0.75, he sells 280 an hour. A) Using the midpoint method, compute the price elasticity of demand for Jose’s donuts. Please show the formula used for understanding.  B) Based on (A) is demand for Jose’s donuts elastic or inelastic? How do you know? Explain  C) Should he raise or lower the price to generate more revenue.

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DE According to the income elasticity formula, Income elasticity of demand = E=% change in quantity demanded + % change in income. By how much will popcorn sales increase if average income goes up by 9 percent? (Assume the income elasticity of popcorn is 3.29.) Instructions: Enter your response as a percentage rounded to one decimal place. percent

3. Fred Jones a new employee at Stibo's Frozen Foods estimates that the price elasticity of demand for Stibo's Frozen Pizzas to be -1.23, as compared to a price elasticity of demand for frozen pizzas in general of -2.34. In light of the relative inelasticity of Stibo's Frozen Pizza's, Fred recommends raising the price to increase sales revenues. You, a more experienced member of the firm, are suspicious of Joe's estimate, and are skeptical of his recommended plan of action? Why? (Hint: Think about the determinants of price elasticity of demand). Reason to suspect Fred's estimate: Reason to doubt Fred's plan of action: