(Transcript of audio with descriptions. Transcript includes narrator headings and description headings of the visual content)
(Speaker)
We are going to use the following table to calculate the price elasticity of demand for each group.
(Description)
The table consists of 2 columns: Group A (sales per week), Group B (sales per week). The table consists of 2 rows: Volume of sales before the 10 percent discount, Volume of sales after the 10 percent discount.
The first row: Volume of sales before the 10 percent discount is, 1.55 million sales per week for the Group A, and, 1.50 million sales per week for the Group B.
The second row: Volume of sales after the 10 percent discount is, 1.65 million sales per week for the Group A, and, 1.70 million sales per week for the Group B.
(Speaker)
Starting with group A, we are going to calculate the percent change in quantity sold.
(Description)
The following text is briefly written below the table:
Percent change in quantity for Group A.
StartStartFraction StartFraction 1.65 million minus 1.55 million OverOver StartFraction 1.55 million plus 1.65 million Over 2 EndFraction EndEndFraction times 100 equals StartFraction 0.1 million Over 1.6 million EndFraction times 100 equals 6.25 percent.
(Speaker)
Using the midpoint method, the numerator is the change in sales from before to after the discount, in this case, the difference between 1.65 million and 1.55 million, or 0.1 million.
(Description)
1.55 million and 1.65 million are briefly highlighted in the first column of the table (Group A).
(Speaker)
The denominator is the average of the sales or 1.6 million. Solving we find the percent change in quantity to be 6.25 percent.
In order to find the elasticity of demand for a group A, we must divide the percent change in quantity by the percent change in price.
(Description)
The following text is briefly written below the table:
The demand elasticity for Group A given a price change of 10 percent is:
The percent change in quantity divided by the percent change in price equals 6.25 percent divided by 10 percent equals 0.625
(Speaker)
We found the percent change in quantity to be 6.25 percent and the problem gives us the percent change in price as 10 percent.
Together, we have a demand elasticity for group A of 0.625 percent.
We are going to use the same method to find the demand for group B.
(Description)
The following text is briefly written below the table:
Percent change in quantity for Group B.
StartStartFraction StartFraction 1.7 million minus 1.5 million OverOver StartFraction 1.7 million plus 1.5 million Over 2 EndFraction EndEndFraction times 100 equals StartFraction 0.2 million Over 1.6 million EndFraction times 100 equals 12.5 percent
(Speaker)
First, we're going to calculate the percent in quantity sold. The numerator is the difference between 1.7 million and 1.5 million or 0.2 million.
(Description)
1.50 million and 1.70 million are briefly highlighted in the second column of the table (Group B).
(Speaker)
The denominator is the average of the sales or 1.6 million. Solving we find the percent change in quantity to be 12.5 percent.
In order to find the elasticity of demand for group B, we must divide the percent change in quantity by the percent change in price.
(Description)
The following text is written below the table:
The demand elasticity for Group B given a price change of 10 percent is:
The percent change in quantity divided by the percent change in price equals 12.5 percent divided by 10 percent equals 1.25.
(Speaker)
We found the percent change in quantity to be 12.5 percent and the problem gives us the percent change in price as 10 percent. Together, we have a demand elasticity for group B of 1.25.