Homework: Homework 4 Score: 0 of 2 pts Concept: Midpoint Formula 4 7 of 15 (11 c

Question

Homework: Homework 4 Score: 0 of 2 pts Concept: Midpoint Formula 4 7 of 15 (11 complete) HW Score: 63 8996, 19 17 of 30 pt Question Help The figure to the right lustrates the demand for taxi rides in a large city. Suppose the price per ride is initially $50 but then falls to $20 due to a recession. What is the price elasticity of demand for taxi rides? Using the midpoint formula, the price elasticity of demand isEnter your response rounded to two decimal places) 40000 80.000 120 000 160,000 200,000 240,000 Quantity (laodi rides per day) Enter your answer in the answer box and then click Check Answer Clear All remaining

Explanation / Answer

Price Elasticity of Demand= (percent change in quantity / percent change in price)

Percent change in quantity = (Q2?Q1) ×100 / [(Q2+Q1)÷2]

Here, Q1 = 20,000 and Q2 = 140,000

So, Percent change in quantity = 150

Percent change in price=(P2?P1) * 100 / [(P2+P1)÷2]

Here, P1 = $50 and P2 = $20

So, Percent change in price = -85.71

Now the price elasticity of demand is = 150 / -85.71 = -1.75

Please like my answer.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.