The quantity demanded of cell phones, as a function of market price, is given in the following table. Demanded Pice (Euro) quantity (units) 474 2686 316 5372 158 8058 a) Compute the price elasticity of demand when the price falls. Do the math the other way around when the price goes up. Are the elasticity coefficients' values in both directions the same? b) Find also the arc elasticity of demand. Situation A B с Interval A -> B B -> C Price elasticity of demand when the price falls Interval B -> A C -> B Price elasticity of demand when the price goes up Interval A -> B B -> C Arc elasticity of demand when the price falls Interval B -> A C -> B Arc elasticity of demand when the price goes up

The quantity demanded of cell phones, as a function of market price, is given in the following table. Demanded Pice (Euro) quantity (units) 474 2686 316 5372 158 8058 a) Compute the price elasticity of demand when the price falls. Do the math the other way around when the price goes up. Are the elasticity coefficients' values in both directions the same? b) Find also the arc elasticity of demand. Situation A B с Interval A -> B B -> C Price elasticity of demand when the price falls Interval B -> A C -> B Price elasticity of demand when the price goes up Interval A -> B B -> C Arc elasticity of demand when the price falls Interval B -> A C -> B Arc elasticity of demand when the price goes up

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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