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30 November, 02:48

Adam and barb go to the store to purchase some lottery tickets. without looking at the price, adam says "i'll take 10 lottery tickets," and barb says "i'll take $10 worth of lottery tickets." what is each person's price elasticity of demand for lottery tickets

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  1. 30 November, 06:29
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    Price elasticity of demand for Adam=0

    Price elasticity of demand for Barb=1

    Explanation:

    Price elasticity of demand = %age change in demanded QTY / %age change in demanded price

    The price is not important for Adam, and he demands a fixed quantity, hence his demand curve is vertical. A perfectly vertical demand curve is can inelastic demand curve and has price elasticity = 0

    The quantity is not important for Barb, and he demands a fixed price, hence his demand curve is horizontal. A perfectly horizontal demand curve is has price elasticity = 1
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Home » Business » Adam and barb go to the store to purchase some lottery tickets. without looking at the price, adam says "i'll take 10 lottery tickets," and barb says "i'll take $10 worth of lottery tickets.
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