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Price of bananas in Adelaide market increased from $3.00 to $5.00 per kg. As a result, the quantity demanded for bananas decreased from 650 kg
- Price of bananas in Adelaide market increased from $3.00 to $5.00 per kg. As a result, the quantity demanded for bananas decreased from 650 kg to 450 kg per day. Using the midpoint formula:
- Calculate the price elasticity of demand (Ed) for bananas.
- Is the demand for bananas elastic or inelastic or unitary elastic? Explain why?
- Interpret the Ed coefficient (value) of bananas. (In your interpretation, please mention percentage change by which the quantity demanded for bananas has changed (%DQ) as a result of percentage change in the price (%DP) of it.)
- Will the above change in price cause the total revenue for sellers to increase or decrease or remain unchanged? Show how you worked it out?
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Contemporary Management
Authors: Gareth Jones, Jennifer George
9th Edition
0077718372, 978-0077718374
