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16 June, 06:54

Suppose that during the past year, the price of a laptop computer fell from $2,350 to $1,930. During the same time period, consumer sales increased from 436,000 to 537,000 laptops.

Calculate the elasticity of demand between these two price

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  1. 16 June, 10:21
    0
    -1.06

    Explanation:

    The computation of the elasticity of demand between these two price is shown below:

    (A) (B) (A + B) : 2 (B - A)

    Particulars Original New Average Change Percentage in change

    Quantity 436000 537000 486500 101000 20.76%

    Price $2,350 $1,930 $2,140 $-420 - 19.63%

    As we know that

    Price elasticity of demand = (Percentage change in quantity demanded) : (percentage change in price)

    = 20.76% : - 19.63%

    = - 1.06
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