ECONO 2202-Net03 Homework: Homework 4 Score: 1.5 of 2 pts Hw score: 51.67%, 155
ID: 1162294 • Letter: E
Question
ECONO 2202-Net03 Homework: Homework 4 Score: 1.5 of 2 pts Hw score: 51.67%, 155 of 30 pts End of Chapter 1.6 table gives data on the price of rye and the number of bushels of rye sold in 2015 and 2016 Year (Dollars per bushell 2015 2016 S3.00 S2 00 8,000,000 The change in the quantty of rye dermanded divided by the change in the price of rye in bushels is a. Calculate the change in the quantity of rye demanded divided by the (Enter your response as an integer. Include a minus sign if necessary) b. Calculate the change in the quantity of rye demanded divided by millions of bushels is -2 (Enter your response as an integer Include a minus sign if necessary) of bushels The change in the quantity of rye demanded divided by the change in the price ot rys in to part a, the answer to part b is smaller in absolute terms (ie, ignore the sign of these values demand for ing that the demand curve the midpoint formula, the price elasticity of demand for ye is (Enter your response rounded to two decimal places-do not forget to include the minus sign) k Check Answer Clear All O Type here to searchExplanation / Answer
(a) (In bushels) Change in the quantity demanded /Change in the price = (8,000,000- 6000,000)/ (2-3) = -2000,000.
(b) (In millions of bushels) Change in quantity demanded/ change in price =( 8 - 6 )/ (2-3) = -2 .
Capared to part (a) , Answer to part(b) is smaller in absolute terms.
(c) Price Elasticity of demand (Mid-point formula) = % change in quantity / % change in price
% change in quantity = (Q2 - Q1) / [(Q2 + Q1)/2] 100
= (8,000,000 - 6,000,000) / [(8,000,000 + 6,000,000)/2] 100
= [2,000,000 / (14,000,000 / 2)] 100
= [2,000,000 /7,000,000 ] 100
= 0.285(100)
= 28.57.
% change in price = (P2 - P1)/ [ (P2 + P1)/2] 100
= (2 -3)/ [(2+3)/2] 100
= [-1/ (5/2) ] 100
= (-2/5) 100
= -40
Price elasticity of demand = 28.57 /-40
= - 0.71
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