Question #182624

illustrate the elasticity of demand in the market for whiskey. Clearly indicate the correct percentage changes in price and quantity on the elasticity graph.


1
Expert's answer
2021-04-23T07:35:38-0400

The price elasticity of demand for whiskey can be calculated as follows:

Ed=Ed = %∆Q / %∆P%∆Q / %∆P

=(Q2−Q1/0.5(Q2+Q1))×0.5(p2+P1)= (Q2 - Q1/0.5(Q2 + Q1)) × 0.5(p2 + P1)

Ed=(800−1100/0.5(800+1100))×(0.5(R150−R100)/R150−R100)Ed = (800-1100/0.5(800 + 1100) ) × (0.5(R150 - R100)/R150-R100)

=−0.79= -0.79




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