Rain spoils the strawberry crop, the
a. Calculate the price elasticity of
b. Describe the demand for strawberries.
(a)
Price elasticity of demand.
Explanation of Solution
The general formula for calculating price elasticity of demand is shown below.
By substitute the respective values in Equation (1) to calculate the price elasticity of demand.
Price elasticity of demand is -1.25.
Price elasticity of demand: Price elasticity of demand refers to the responsiveness of changes or the change in quantity demanded due to the change in price.
(b)
Demand for strawberries.
Explanation of Solution
The price elasticity of demand for strawberries is exceeds 1, which means, the demand for strawberry is elastic.
Price elasticity of demand: Price elasticity of demand refers to the responsiveness of changes or the change in quantity demanded due to the change in price.
Want to see more full solutions like this?
Chapter 4 Solutions
Microeconomics (12th Edition) (Pearson Series in Economics)
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education