When the price is $8, the quantity demanded is 36 units. When the price drops to $6, quantity demanded increases to 52 units. Calculate the own-price elasticity of demand coefficient. Interpret it.

Over this range, is demand elastic or inelastic, and why?

To increase revenue, at least in the short-run, would you recommend a price increase or a price decrease, and why?

Using the short cut formula, calculate and interpret own-price flexibility of demand. Show formula in detail.

Answer rating: 100% (QA)

As the price declines from 8 to 6 the quantity demanded increases from 36 units to 52 units According to the mathematical formula to calculate own pri... View the full answer