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Question 1 of 5

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Suppose that, if the price of movie tickets increases from $10.50 to $11.50, the quantity demanded decreases from 2,541,000 to 2,212,000.

Which is the correct formula for the elasticity of demand?

Demand elasticity measures the responsiveness of quantity to price. It is represented in terms of “percentage change,” which is written as “%∆.”
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Suppose that the price of movie tickets increases from $10.50 to $11.50, and the quantity demanded decreases from 2,541,000 to 2,212,000. Using the base method (in which the original value appears in the denominator), if the elasticity of demand is measured as how much is %∆Q? Round the answer to two decimal places. %

The percentage change formula is 100% * (new value – original value) / original value. Here, we calculate %∆Q =100% * (2,212,000 - 2,541,000)/2,541,000.
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Suppose that the price of movie tickets increases from $10.50 to $11.50, and the quantity demanded decreases from 2,541,000 to 2,212,000. Using the base method (in which the original value appears in the denominator), if the elasticity of demand is measured as how much is %∆P? Round the answer to two decimal places. %

Using the percentage change formula, we calculate %∆P = 100% * (11.50-10.50)/10.50.
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If %∆Q = -12.95%, %∆P = 9.52%, and , how much is elasticity? Round the answer to two decimal places.

Here elasticity is equal to 12.95 divided by 9.52.
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We can conclude that movie-ticket demand is because this elasticity is .

The value of 1.36 is greater than one, but not infinite. It is therefore elastic, but not perfectly elastic.
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