Other Problems: 1. Use the information in the table below to identify the type of cross elasticity relationship between products X and Y and whether demand is cross elastic or cross inelastic in each of the following ve cases, A to E. Percent change in quantity Percent change Cross elasticity Cross Elastic A 5 7 B 9 6 C 5 5 D 3 0 E 2 10 2. Use the information in the table below to identify the income elasticity type of each of the following products. A to E. Income Percent change Income elastic, Percent change in quantity elasticity inelastic Wandatum A 9 12 B -6 6 C 3 3 D 6 3 Steps-MaideterminesELASTICITY? As we have seen above it is important to a company to have an idea of the value of the elasticity of demand of its good or service as it will affect what happens to their total revenue as price changes. What should the company aim to do with their price in each of the circumstances below? Elasticity Which change in price would increase total revenue?? (Increase or decrease?) - - Judge the products in the table belOw to decide whether you think they will be elastic or inelastic: Product Elastic or inelastic? Apple iPhone Step 2 - ELASTIC MONEY? Different elasticity values will lead to different effects on the level of total revenue a firm receives. For example, if a good is elastic and a firm increases the price by 10%, they will lose more than 10% of their business, and so although they are getting more money for each one they sell, they are selling far fewer. TR=Price x Quantity Sold To see the effect that elasticity has on total revenue, fill in the table below: Price Quantity Revenue Price Elasticity of Before price After price Initial New Initial New Demand change change 25 30 100 40 1. 40 70 120 90 2. 200 210 80 64 3. 50 75 150 135 4 Has revenue increased or decreased in each case? 1. 2. 3.Name Worksheet on Elasticity Step 1 - ELASTICOI'INELASTIC? Price Elasticity of Demand is a measure of how responsive demand is to a change in price. If a price change leads to a considerably bigger change in quantity demanded, we would consider the good to be responsive to a price changehence elastic. If, however, a similar price change leads to a much smaller change in demand, we would consider it inelastic. To get a more precise measure of the responsiveness to a price change we can calculate a value for price elasticity of demand. We use the formula: PRICE ELASTIC!\" 0F DEMAND Wad = percentage change in price W X100 PERCENTAGE CHANGE: Original Nu mber Use the formula above to calculate values of Price Elasticity for all the situations below