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What is the arc-elasticity of demand when price increases from 35 to 45? |e| = ______

by

  1. What is your name?

  2. What is the elasticity of demand for regular soda and other sugar-added beverages in the first year?



    |e| = ______

  3. Is demand elastic or inelastic?

    1. Elastic

    2. Inelastic

  4. Will expenditures by consumers on regular soda and other sugar-added beverages increase or decrease?

    1. Increase

    2. Decrease

  5. Will consumption fall by more than 67% relative to current levels or less than 67% when consumers have more time to adjust to the higher prices? Assume that demand is constant; that is, that income,  prices of substitutes and complements, and population remain constant.

    1. Decrease by more than 67%

    2. Decrease by 67%

    3. Decrease by less than 67%

  6. Suppose that the tax was only on regular Coke and Pepsi. Would consumption of Coke and Pepsi fall by more than 67% relative to current levels or less than 67%

    1. Decrease by more than 67%

    2. Decrease by 67%

    3. Decrease by less than 67%

  7. Compute the arc-price elasticity of demand for the following data.

 

Row

Price

Quantity demanded

1

35

63

2

45

57

 

    1. What is the arc-elasticity of demand when price increases from 35 to 45?



      |e| = ______

    2. What is the arc-elasticity of demand when price decreases from 45 to 35?



      |e| = _____