Consider the following Table below: Product 1 Product 2 Initial price and quantity Price = RM1,000 Quantity = 500 Price = RM20 Quantity = 30 New Price and quantity Price = RM1,500 Quantity = 400 Price = RM15 Quantity = 35 Calculate the price elasticity of demand for Product 1 and Product 2

Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter5: Price Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 4SQP
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  • Consider the following Table below:

 

Product 1

Product 2

Initial price and quantity

Price = RM1,000

Quantity = 500

Price = RM20

Quantity = 30

New Price and quantity

Price = RM1,500

Quantity = 400

Price = RM15

Quantity = 35

 

Calculate the price elasticity of demand for Product 1 and Product 2 (20 marks).

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