You own a hot dog stand that you set up outside the student union every day at

Question:

You own a hot dog stand that you set up outside the student union every day at lunchtime. Currently, you are selling hot dogs for a price of $3 each, and you sell 30 hot dogs a day. You are considering cutting the price to $2. The graph on the next page shows two possible increases in the quantity sold as a result of your price cut. Use the information in the graph to calculate the price elasticity of demand between these two prices on each of the demand curves. Use the midpoint formula to calculate the price elasticities.