Problem

Why is the demand curve with constant unitary ela…

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Problem 2 Medium Difficulty

From the data in Table 5.6 about supply of alarm clocks, calculate the price elasticity of supply from: point J to point K, point L to point M, and point N to point P. Classify the elasticity at each point as elastic, inelastic, or unit elastic.

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Principles of Microeconomics for AP® Courses

Chapter 5

Elasticity

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Video Transcript

all right, this is problem number two from Chapter five. Andi. It is asking us from the data shown in table 5.6, which I put to the right about supply of alarm clocks. Calculate the price elasticity of supply from Point Jada Point, K Point, Elder Point, M and Point and two point Peak. Classify that us says each point is elastic and elastic or unit elastic. So let's start with J K. I remember that we're looking at percent change quantity over percent change price. That's the formula for elasticity. Um, and for the first part of J K, quantity goes from 70 to 50 cents. 20 over the average of those which is 60. It's 33% um, and well, 33.3%. Let's be Let's be a little more accurate Then. For price, we have 8 to 9. That's one over won over 8.5, which is equal to 11.8%. So final answer for this one for the U. Estes ity from point A to point a is 33.3% over 11.8% about 2.822 point 82 All right from ELT em. We have an increase of eight. So we have eight over the average of those 84. That's right. The average of 80 and 88 would be 84 which equals 9.5 to percent. Now, for price increase from 10 to 11 that's one over 10 points. Five and again, we're getting that from subtracting the final minus the initial, then averaging. The two are, you know, dividing that by the average of the two, um, and one divided by 10.5 equals, You guys didn't 9.52 percent. So of course, 9.52 Divided by 9.52 Is one us. That's what us sissy for. L m I'm just gonna box this in a year. So it's very clear what all this work is referring to. And I'm in a box. This in here. Okay, Finally, for N p. Um, we're looking at an increase of five divided by 97.5, which equals, that is 5.13% were then looking at an increase of $1.1 over 12 point five, which equals is 8%. So 5.13% divided by 8% equals drumroll, please. Is your 0.64 one And this problems Also asking us to classify these points? Yep. Okay, So what do we know about elasticity? Well, if it's greater than one, it's elastic. If it's equal to one, it's unit elastic. And if it's less than one, it is an elastic. So this first point from J decay is 2.82 So that is e elastic, right? Because that's greater than one. This next part from L too am is one that is gonna be unit elastic because it is exactly one. Then the last part is you guessed it in elastic because it's less than 10.641

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