Question (Category: Economics Microeconomics )
How to calculate price elasticity of demand, PED (mid-point method) The following table shows part of the demand function for tickets to an outdoor summer concert by a popular singing group Price (P)...Quantity (Q) 50........... 100 35.......... 180 20............300 10............500 a. (2 pts.) What is demand elasticity in the $35 - $50 price range? Is demand elastic, inelastic, or of unitary elasticity? Calculate the value and show all of your work . Be sure to use the midpoint equation to determine elasticity. b. (4 pts.) Assume demand elasticity is 1.0 in the $20 - $35 price range. In this range of demand, by what percentage would quantity demanded change if price decreases by 5 percent? Show your detailed calculations c. (4 pts.) What is the effect of a price increase from $10 to $20 on total revenue for the event? Does total revenue (TR) increase, decrease, or remain the same? By how much? Show your detailed calculations.
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