Elastic Demand - 12 |
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If a given change in price causes a larger proportionate change in
quantity demanded, then the demand for the good or service is said to be elastic.
In the diagram to your left, the price of Moo iced coffee drink has risen from $1.50 to $1.70 per 500 ml container. Sales at your local corner store of ''Moo'' fall from 500 containers per week to 300 containers per week. |
Calculate the percentage increase in price, and the percentage decrease in quantity sold. Calculate the price elasticity of ''Moo''.