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Answer both parts of the following question. a. The San Francisco Chronicle reported that the toll on the Golden Gate Bridge was raised from $2 to $3. Following the toll increase, traffic fell by 5 percent. Based on this information, calculate the arc price elasticity of demand. Is demand elastic or inelastic

User Ktdrv
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1 Answer

1 vote

Answer:

The answer is "0.1".

Step-by-step explanation:

Formula:


\text{Elasticity}= \frac{\% \text{volume changes in demand}}{ \% \text{price rise}}

Calculating the value of price percent:


= ((3-2))/(2) * 100 \\\\= (1)/(2) * 100 \\\\= (100)/(2) \\\\=50 \%

Calculating the value of quantity change:
= -5 \%

Calculating the value of elasticity:


= (-5)/(50) \\\\ = (-1)/(10) \\\\= -0.1

Through this convention, the environmental signal is decreased and elasticity =0.1 is achieved until conductivity. Whose comparatively in elasticity is not as high as 1.

User Gatti
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