3.b. From the given demand Schedule, calculate the price elasticity of demand.
Price of Air Tickets (Per
Tickets )
Quantity Demanded
(tickets per month)
1,00,000
5,000
1,20.000
3,500
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I guess it's not the complete questions
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Answer:
Concept:
Price Elasticity of Demand is the percentage of change in quantity demanded divided by the percentage change in price.
Given:
p1= 5000, p2= 3500
q1=100000, q2= 120000
To find:
Price elasticity of Demand =- % change in Qd/ % change in P
= (q2-q1)/(p2-p1)*p1/q1
= -(20000/1500)*5000/100000
=-0.67
Therefore, the price elasticity of demand is 0.67.
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