Homework Sourse1 There are several ways of Finding out the price elasticity
1. There are several ways of Finding out the price elasticity of demand (e); depending on the type of data.(a) Percentage change formula(b) Mid-point formula(c) Slope of demand: ii. Find out\"using this method for the following demand curves at P= 10: A. P= 150-3:5Q
Solution
a. The percentage change formula at price = 10
= ((115-118.5)/118.5)/((10-9)/9) = -0.27
b. Mid-Point formula at P= 10,
=((115-118.5)/(115+118.5)/2)/((10-9)/(10+9)/2) = -0.28
c. Slope of demand at P =10
=((115-118.5)/((10-9))) = -3.5
| P | Q | a.Percentage change formula | b.Midpoint formula | c.Slope of demand |
| 1 | 146.5 | |||
| 2 | 143 | -0.02 | -0.04 | -3.5 |
| 3 | 139.5 | -0.05 | -0.06 | -3.5 |
| 4 | 136 | -0.08 | -0.09 | -3.5 |
| 5 | 132.5 | -0.10 | -0.12 | -3.5 |
| 6 | 129 | -0.13 | -0.15 | -3.5 |
| 7 | 125.5 | -0.16 | -0.18 | -3.5 |
| 8 | 122 | -0.20 | -0.21 | -3.5 |
| 9 | 118.5 | -0.23 | -0.25 | -3.5 |
| 10 | 115 | -0.27 | -0.28 | -3.5 |
| 11 | 111.5 | -0.30 | -0.32 | -3.5 |
| 12 | 108 | -0.35 | -0.37 | -3.5 |
