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missy
Lv 4
missy asked in Social ScienceEconomics · 1 decade ago

More Econ help needed?

If the price of gasoline increases from $2.50 per gallon to $3.00 per gallon and the quantity demanded goes down from 120 million gallons per week to 115 million gallons per week, the absolute value of price elasticity of demand in that price range is approximately

1 Answer

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  • Anonymous
    1 decade ago
    Favorite Answer

    (5/117.5 ) / (0.5/2.75)

    i.e percent change in quantity divided by percent change in price.

    percent change = (new - old) / average of new & old

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