Answer:
Jim’s own price elasticity of demand is 1
Step-by-step explanation:
Price elasticity is referred to as the effect on demand of a product or service with change in the price of that product or service. It is calculated as the ratio between the increase or decrease in demand with the increase or decrease in price.
we are provided with the following data;
Original quantity demanded = 8000 units
new quantity demanded = 6000 units
change in quantity demanded= 8000 - 6000 = 2000 units
Original price = $200
new price = $250
change in price = $250 - $200 = $50
Price elasticity of demand;
(change in quantity ÷ original quantity) × (original price ÷ change in price)
= (2000 ÷ 8000) × (200 ÷ 50)
= 0.25 × 4
= 1
Jim's own price elasticity of demand = 1