Ask Question
30 November, 08:07

Draw a graph AND calculate the price elasticity of the demand for chocolate bars if the price goes from $2 to $3, causing you to change your weekly consumption from 8 bars per week to 5. Show all work and explain what the outcome means to a business!

+4
Answers (1)
  1. 30 November, 10:50
    0
    The formula for the price elasticity is given by

    e = [ (Q2 - Q1) / Q1] / [ (P2 - P1) / P1]

    Substituting the given values

    e = [ (5 - 8) / 8] / [ (3 - 2) / 2]

    e = - 0.75

    The demand is inelastic since the elasticity is less than 1. The graph would be a line sloping towards the left.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Draw a graph AND calculate the price elasticity of the demand for chocolate bars if the price goes from $2 to $3, causing you to change ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers