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When the price of oranges increases from $4 to $6 per bag, the quantity demanded of oranges decreases from 800 bags to 700 bags. The price elasticity of demand over this price range is equal to___________

User Cuel
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1 Answer

4 votes

Answer:

0.25

Step-by-step explanation:


Percentage\ increase\ in\ price=(6-4)/(4)*100

= 50%


Percentage\ Decrease\ in\ quantity\ demanded=(800-700)/(800)*100

= 12.5%

Therefore,


price\ elasticity\ of\ demand=(Percentage\ change\ in\ quantity\ demanded)/(percentage\ change\ in\ price)


price\ elasticity\ of\ demand=(12.5)/(50)

= 0.25

Hence, the price elasticity of demand over this price range is equal to 0.25

User Ssundarraj
by
7.7k points

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