Ask Question
12 October, 19:16

Suppose the market for orange juice is in equilibrium at a price of $2.00 per bottle and a quantity of 4200 bottles per month. Now suppose that at a price of $3.00 per bottle, quantity demanded falls to 3000 bottles per month and quantity supplied increases to 4500 bottles per month

+4
Answers (1)
  1. 12 October, 21:39
    0
    Price elasticity of demand = 1.2

    Explanation:

    Given:

    Old price (P0) = $2

    New Price (P1) = $3

    Old quantity (Q0) = 4,200

    New quantity (Q1) = 3,000

    Price elasticity of demand = ?

    Computation of Price elasticity of demand:

    Price elasticity of demand = % change in quantity / % change in price

    Price elasticity of demand = [ (4,200-3,000) / 3,000] / [ (3-2) / 3]

    Price elasticity of demand = 1.2
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Suppose the market for orange juice is in equilibrium at a price of $2.00 per bottle and a quantity of 4200 bottles per month. Now suppose ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers