Question

At $6 per steak, consumers are willing to buy two steaks. At a price of $2, consumers are willing to buy six steaks. The elasticity of the market demand curve between P = $6 and P = $2 (dropping all minus signs) is____________.

Answer 1

The elasticity of the market demand curve between $6 and $2 is approximately 2.99.

Step-by-step explanation:

The elasticity of the market demand curve can be determined using the formula:

Elasticity = Percentage change in quantity demanded / Percentage change in price

Given that at $6 per steak, consumers are willing to buy two steaks, and at a price of $2, consumers are willing to buy six steaks, we can calculate the percentage change in quantity demanded and the percentage change in price:

Percentage change in quantity demanded = (6 - 2) / 2 = 2

Percentage change in price = (6 - 2) / 6 = 4/6 ≈ 0.67

Therefore, the elasticity of the market demand curve between P = $6 and P = $2 is:

Elasticity = 2 / 0.67 ≈ 2.99

Answer 2

The elasticity of the market demand curve between P = $6 and P = $2 (dropping all minus signs) is 1.

Step-by-step explanation:

Elasticity of demand = [(6 - 2)/(6 + 2)/2]/[(2 - 6)/(2 + 6)/2]

= 1

Therefore, The elasticity of the market demand curve between P = $6 and P = $2 (dropping all minus signs) is 1.