Question
Price Elasticity Questions: 1) A market researcher notices that, when the price of good A is increased from $1 per unit to $2 per unit,
Price Elasticity Questions:
1) A market researcher notices that, when the price of good A is increased from $1 per unit to $2 per unit, the quantity demanded falls from 6000 to 5400 units of A per day.
Questions:
(a) Define the term "Price Elasticity of Demand."
(b) Calculate the price elasticity of demand for good A in the price range given.
(c) Is the demand for good A elastic or inelastic? Explain.
(d) Based on your answer in part (c), what are some of the characteristics of good A? Explain.
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International Economics Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc Melitz
11th Edition
134519574, 9780134521046 , 978-0134519579
