Question

If the price declines from $400 to $300 and, as a result, quant
1400, elasticity of demand is:
a) 1.78
b) 0.92
c) 1.12
d) 3.42
Answer​

Answer 1

Answer:

hey this is ur answer

400×300÷1100×-100=1.09

Answer 2

Question:

If the price declines from $400 to $300 and, as a result, quantity demanded increases from 1100 to 1400, elasticity of demand is:

a) 1.78 b) 0.92 c) 1.12 d) 3.42

The Answer is Inelastic demand ( - 0.857)

Explanation:

Average price = ($400 + $300) ÷ 2

                        = $350

Percentage change in price = ($400 - $300) ÷ $350

                                               = $100 ÷ $350

                                               = 0.28

Average quantity demanded = (1,100 + 1,400) ÷ 2

                                                = 1,250

Percentage change in quantity demanded:

= (1,100 - 1,400) ÷ 1,250

= -0.24

Therefore,

Elasticity of demand:

= Percentage change in quantity demanded ÷ Percentage change in price

= -0.24 ÷ 0.28

= - 0.857

Inelastic demand

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