Suppose that during the past year, the price of a virtual reality headset fell from $4,350 to $3,930. During the same time period, consumer sales increased from 386,000 to 487,000 headsets. Calculate the elasticity of demand between these two price-quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign.) Original Average Change Percentage Change Quantity Price $ New
Suppose that during the past year, the price of a virtual reality headset fell from $4,350 to $3,930. During the same time period, consumer sales increased from 386,000 to 487,000 headsets. Calculate the elasticity of demand between these two price-quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign.) Original Average Change Percentage Change Quantity Price $ New
Chapter20: Elasticity: Demand And Supply
Section: Chapter Questions
Problem 2E: Plot the price and quantity data given in the demand schedule of exercise 1. Put price on the...
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Step 1: Fill in the appropriate values for original quantity, new quantity, original price , and new price.
Step 2: Calculate the average quantity by adding the original quantity and the new quantity, and then dividing by two. Do the same for the average price.
Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the change in price.
Step 4: Calculate the percentage change in quantity demanded by dividing the change in quantity by the average quantity. Do the same to calculate the percentage change in price.
Step 5: Calculate the price elasticity of demand by dividing the percentage change in quantity demanded by the percentage change in price, ignoring the negative sign.
Using the midpoint method, the elasticity of demand for headsets is about (.44/1.14/2.28/4.56)
Transcribed Image Text:Suppose that during the past year, the price of a virtual reality headset fell from $4,350 to $3,930. During the same time period, consumer sales
increased from 386,000 to 487,000 headsets.
Calculate the elasticity of demand between these two price-quantity combinations by using the following steps. After each step, complete the relevant
part of the table with the appropriate answers. (Note: For decreases in price or quantity, enter values in the Change column with a minus sign.)
Original
Average
Quantity
Price
New
$
Change
$
Percentage Change
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