Question

3. If the price elasticity of demand for tractors priced between $4,000 and $6,000 is
-0.75 (using the mid-point method), what will be the percentage change in quantity
demanded when the price for tractors falls from $6,000 to $4,000?

Answer 1

$Es=\frac{\%∆Q}{\%∆P}$

%∆P=$\frac{P2-P1}{\frac{P2+P1}{2}}$ =$2000/$5000= 0.4

Es= -0.75

%∆Q=-0.75*0.4= -0.3