spacegrrrl2000
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The table below shows the demand schedule for a pint of Sweet Chocolate, a delicious peanut butter chocolate stout:

Price Quantity Demanded
$8 3
$6 5
One of the problems with the basic elasticity formula is that you get different elasticity values depending on whether you assume the price falls from $8 to $6, or whether you assume the price rises from $6 to $8. The question below illustrates how the midpoint formula corrects for this problem.

The price elasticity of demand if the price of a pint falls from $8 to $6 is ______


The price elasticity of demand if the price of a pint rises from $6 to $8 is ______

Respuesta :

sqdancefan

Answer:

  • price falling: -8/3
  • price rising: -6/5

Step-by-step explanation:

a) price falling:

  (fractional change in demand)/(fractional change in price) = ((5 -3)/3)/((6 -8)/8)

  = (2/3)/(-2/8) = -8/3

__

b)  price rising:

  (fractional change in demand)/(fractional change in price) = ((3-5)/5)/((8 -6)/6)

  = (-2/5)/(2/6) = -6/5

The price elasticity of demand if the price of a pint falls from $8 to $6 is  -8/3

And,

The price elasticity of demand if the price of a pint rises from $6 to $8 is -6/5.

Calculation of price elasticity of demand:

a) When the price falling

[tex]= ((5 -3)\div 3)\div ((6 -8)\div 8)\\\\= (2\div 3)\div(-2 \div8) \\\\= -8 \div3[/tex]

b)  When the price rising:

[tex]= (-2\div 5)\div (2\div 6) \\\\= -6\div 5[/tex]

Learn more about the price here: https://brainly.com/question/22313042