Question

Suppose you own a bookstore where you currently sell 22 John Grisham mystery novels per day at a price of ​$35 per book. ​ However, if you were to reduce the price to ​$30​, then you would sell 26 John Grisham mystery novels per day. Using the midpoint​ formula, what is the price elasticity of demand for John Grisham mystery ​novels? nothing. ​(Enter a numeric response using a real number rounded to two decimal places.​ Don't forget the minus​ sign.) In this price​ range, the demand for John Grisham mystery books is ▼ inelastic elastic .

Answer 1

Price elasticity of demand = -1.08

Step-by-step explanation:

According to the scenario, computation of the given data are as follows:

Quantity 1(Q1) = 22

Quantity 2(Q2) = 26

Price 1(P1) = $35

Price 2(P2) =$30

Price elasticity of demand = [(Q2-Q1) ÷ {(Q1 + Q2)} ÷ 2] ÷ [(P2-P1) ÷ {(P1 + P2)÷2}]

= [(26-22) ÷ {(22 + 26)} ÷ 2] ÷ [(30-35) ÷ {(35+ 30)÷2}]

=-(139 ÷ 128)

= -1.08