A decrease in the price of eggs from $1.50 to $1.30 per dozen resulted in an increase in egg purchases in two cities. In Philadelphia, daily egg purchases increased from 6000 to 8000 dozens; in nearby Dover, Delaware, daily egg purchases increased from 300 to 400 dozens. The price elasticity of demand is therefore _________.a. greater in the smaller city as would be expected. b. certainly affected by population differences in different markets. c. the same in Philadelphia as in Dover. d. lower in the smaller city as would be expected.

Respuesta :

Answer:

c. the same in Philadelphia as in Dover.

Explanation:

Price elasticity of demand = Change in quantity of demand / Change in the price of product

In Philadelphia

Price elasticity of demand = (( 6000-8000 ) / 6000 ) / (( $1.5 - $1.3 ) / 1.5 )

Price elasticity of demand = 0.3333 / 0.1333

Price elasticity of demand = -2.5

In nearby Dover

Price elasticity of demand = (( 300 - 400 ) / 300 ) / (( $1.5 - $1.3 ) / 1.5 )

Price elasticity of demand = 0.3333 / 0.1333

Price elasticity of demand = -2.5

The Price elasticity is the same in Philadelphia and Dover So the Correct option is c. the same in Philadelphia as in Dover.