toSolved Problem #1] You own a hot dog stand that you set up outside the studeri
ID: 1159063 • Letter: T
Question
toSolved Problem #1] You own a hot dog stand that you set up outside the studerinon every day at lunch y you are selling hot dags for a price of $3, and you sell 30 hot dogs a day (point A on the diagram to the ightf). You are as a result of your price out. Use the inf outing the price to $2. The graph to the right showS two tal axis) to the price elastioty between these wo prices on each of the demand curves Use the midpoint formula to in the graph (new quanéties are given on the On the dermand curve containing the points A' and "8", the price clasicity of domand for a price aut from $3 to $2 is Hint Include the negative sign and enter your response rounded to two deaimal places) On the demand ourve containing the points "A" and "C", the price elasfcity of demand for a price out from $3 to $2 is Hint: Include the negative sign and enfer your response rounded to two decimal places) D2 MacBook Air 5 7Explanation / Answer
When we move from point A to point B that is Price decreases from $3 to $2 then Quantity demanded would increase from 30 to 70
Hence Price Elasticity =% change in quantity/ % change in Price =(70-30)/30/(2-3)/3=-4/3/1/3=-4
When we move from point A to point C that is Price decreases from $3 to $2 then Quantity demanded would increase from 30 to 40
Hence Price Elasticity =% change in quantity/ % change in Price =(40-30)/30/(2-3)/3=-1/3/1/3=-1
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