Good weather brings a bumper tomato crop. The price falls from $£ 7$ to $mathrm{f} 5$ a load, and the quantity demanded increases from 300 to 500 loads a day. Over this price range, a What is the price elasticity of demand? b Describe the demand for tomatoes.
Added by Jared N.
Step 1
The percentage change in quantity demanded is (500 - 300) / 300 = 0.67 or 67%. The percentage change in price is (5 - 7) / 7 = -0.29 or -29%. So, the price elasticity of demand is 0.67 / -0.29 = -2.31. Show more…
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