Try this ECONOMICS/MATH problem!!! I don't get it. Multiple choice. 10 PTS!!?

Question

Suppose the quantity of a steak purchased by the Jones family is 110 pounds per year when the price is $2.10 per pound and 90 pounds per year when the price is $3.90 per pound. The price elasticity of demand coefficient for this family is

a. 0.33

b. 0.50

c. 1.00

d. 2.00

THANK YOU in ADVANCE!

Answer 1

a. 0.33

Middle point for price: (2.10+3.90) / 2 = 3.00

Middle point for quantity: (110+90) / 2 = 100

Change in price 3.90-2.10=+1.80

Change in quantity 90-110= -20

Change in price (%) +1.80/3.00= +60%

Change in quantity (%) -20/100= -20%

E= | ΔQ% / ΔP% | = | -20/60 | = 0.33

Answer 2

The family does not have a demand coefficient. Steak does.

Answer 3

A...0.33

HAVE TAKEN MACRO AND MICRO, IT'S (A)

Answer 4

Isn't it %change in quantity / %change in price. I guess it's closer to .33. Go study.

Answer 5

D

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