Problem - The table below shows the weekly demand for machine screws at the local hardware store.
|
Demand for Machine Screws
|
|
Price (dollars per pack of 100 screws)
|
Quantity (packs of 100 screws)
|
|
$5.00
|
0
|
|
4.50
|
60
|
|
4.00
|
120
|
|
3.50
|
180
|
|
3.00
|
240
|
|
2.50
|
300
|
|
2.00
|
360
|
|
1.50
|
420
|
|
1.00
|
480
|
|
0.50
|
540
|
|
0.00
|
600
|
Instructions: Round your answers to 2 decimal places.
a. Using the regular percentage change method, what is the price elasticity of demand from a price of $4.50 to a price of $4.00 per pack of 100 screws?
b. Using the regular percentage change method, what is the price elasticity of demand from a price of $2.50 to a price of $2.00 per pack of 100 screws?
c. Using the regular percentage change method, what is the price elasticity of demand from a price of $1.00 to a price of $0.50 per pack of 100 screws?