Simple method:

Ed = (Q2-Q1)/Q1* 100

(P2-P1)/P1* 100

Mid-point method:

Ed = (Q2-Q1)/[(Q2+Q1)/2]* 100

(P2-P1)/[(P2+P1)/2]* 100

1.The percentage change in price for a slice of pizza is an increase of 40%, whilst the percentage change in quantity demanded decreases by 15%.

a.What is the price elasticity of demand?

b.Is the demand of this good elastic, inelastic, or unit elastic?

2.When the price of an expresso decreases from $6.00 to $4.50, the quantity demanded increased from 40 to 50 glasses.

a.What is the price elasticity of demand?Use the simple method.

b.Is the demand of this good elastic, inelastic, or unit elastic?

3.The quantity demanded for manila paper increased from 55 to 65 sheets when the price per sheet decreases from $3.50 to $3.00.

a.What is the price elasticity of demand?Use the mid-point formula.

b.Is the demand of this good elastic, inelastic, or unit elastic?

4.When the price rises from $125 to 135, the quantity supplied increases from 2,800 to 3,600 candles.

a.What is the elasticity of supply?Use the simple method.

b.Is the supply of this good elastic, inelastic, or unit elastic?

c.What is the elasticity of supply?Use the mid-point formula.

d.Is the supply of this good elastic, inelastic, or unit elastic?

5.When the price of an expresso decreases from $6.00 to $4.50, the quantity demanded increased from 40 to 50 glasses.

a.What is the price elasticity of demand?Use the mid-point formula.

b.Is the demand of this good elastic, inelastic, or unit elastic?

6.Suppose the price of a particular good increases from $95 to $105.A firm then increases its product of the good from 45 to 55.

a.What is the price elasticity of supply for this good?Use the mid-point formula.

b.Is the supply of this good elastic, inelastic, or unit elastic?

7.A zero elasticity or perfect inelasticity of supply has a_______________________supply curve.