Elasticity Exercise

Use the table below to complete the following exercise.

1. Determine the price elasticity of demand at each quantity demanded. Go from $5 to $10 then from $10 to $15 to $20and so on.
2. Plot the price and quantity data. Indicate the price elasticity value at each point. Illustrate your result on a downward-sloping demand curve.

see the illustration below:

Linear Demand Curve Elasticity Price $7 5 _____ Elastic Range: Elasticity > 1 5 i Unit Elastic at midpoint of line 4 3 ........................................... inelastic Range: Elasticity 1 5 i Unit Elastic at midpoint of line 4 3 ........................................... inelastic Range: Elasticity