contestada

Consider Nibbles, a very specialized brand of parakeet chow.
When its price is $16 per package, it sells 40,000 units. When its price rises to $20, it sells 30,000
units. Calculate its price elasticity of demand, carefully following all numeric directions. You will
interpret this result in the next question.
(Note: Round intermediate steps to four decimal places and your final answer to two. Enter only numbers,
a decimal point, and/or a negative sign as needed in the blank.)

Respuesta :

Parrain

Based on the amount sold at the various prices for Nibbles, the price elasticity of demand would be -1.

First find the percentage changes in price and quantity sold.

What is the percentage change in price and quantity?

= (New price - Old price) / Old price

= (20 - 16) / 16

= 25%

= (New quantity - Old quantity) / Old quantity

= (30,000 - 40,000) / 40,000

= - 25%

What is the price elasticity of demand?

= Change in quantity / Change in price

= - 25% / 25%

= - 1

Find out more on price elasticity of demand at https://brainly.com/question/5078326.

Otras preguntas