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<nav id="TOC">
<ul>
<li><a href="#work-it-out">Work It Out</a>
<ul>
<li><a href="#finding-the-price-elasticity-of-demand">Finding the Price Elasticity of Demand</a>
<ul>
<li><a href="#step-1.-we-know-that">Step 1. We know that:</a></li>
<li><a href="#step-2.-from-the-midpoint-formula-we-know-that">Step 2. From the Midpoint Formula we know that:</a></li>
<li><a href="#step-3.-so-we-can-use-the-values-provided-in-the-figure-in-each-equation">Step 3. So we can use the values provided in the figure in each equation:</a></li>
<li><a href="#step-4.-then-we-can-use-those-values-to-determine-the-price-elasticity-of-demand">Step 4. Then, we can use those values to determine the price elasticity of demand:</a></li>
</ul>
</li>
</ul>
</li>
</ul>
</nav>
<main>
<h1 id="work-it-out">Work It Out</h1>
<h2 id="finding-the-price-elasticity-of-demand">Finding the Price Elasticity of Demand</h2>
<p>Calculate the price elasticity of demand using the data in Figure 5.2 for an increase in price from G to H. Has the elasticity increased or decreased?</p>
<h3 id="step-1.-we-know-that">Step 1. We know that:</h3>
<p> <svg class="math" xmlns:xlink="http://www.w3.org/1999/xlink" width="52.751ex" height="6.176ex" style="vertical-align: -2.505ex;" viewBox="0 -1580.7 22712.1 2659.1" role="img" focusable="false" xmlns="http://www.w3.org/2000/svg" aria-labelledby="svg_title_1"><title id="svg_title_1">Price Elasticity of Demand equals percent change in quantity Over percent change in price </title><defs aria-hidden="true"><path stroke-width="1" id="E1-MJMAIN-50" d="M130 622Q123 629 119 631T103 634T60 637H27V683H214Q237 683 276 683T331 684Q419 684 471 671T567 616Q624 563 624 489Q624 421 573 372T451 307Q429 302 328 301H234V181Q234 62 237 58Q245 47 304 46H337V0H326Q305 3 182 3Q47 3 38 0H27V46H60Q102 47 111 49T130 61V622ZM507 488Q507 514 506 528T500 564T483 597T450 620T397 635Q385 637 307 637H286Q237 637 234 628Q231 624 231 483V342H302H339Q390 342 423 349T481 382Q507 411 507 488Z"></path><path stroke-width="1" id="E1-MJMAIN-72" d="M36 46H50Q89 46 97 60V68Q97 77 97 91T98 122T98 161T98 203Q98 234 98 269T98 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<h3 id="step-2.-from-the-midpoint-formula-we-know-that">Step 2. From the Midpoint Formula we know that:</h3>
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<h3 id="step-3.-so-we-can-use-the-values-provided-in-the-figure-in-each-equation">Step 3. So we can use the values provided in the figure in each equation:</h3>
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<p> <svg class="math" xmlns:xlink="http://www.w3.org/1999/xlink" width="9.558ex" height="2.343ex" style="vertical-align: -0.505ex;" viewBox="0 -791.3 4115.3 1008.6" role="img" focusable="false" xmlns="http://www.w3.org/2000/svg" aria-labelledby="svg_title_6"><title id="svg_title_6">equals negative 11.76</title><defs aria-hidden="true"><path stroke-width="1" id="E1-MJMAIN-3D" d="M56 347Q56 360 70 367H707Q722 359 722 347Q722 336 708 328L390 327H72Q56 332 56 347ZM56 153Q56 168 72 173H708Q722 163 722 153Q722 140 707 133H70Q56 140 56 153Z"></path><path stroke-width="1" id="E1-MJMAIN-2212" d="M84 237T84 250T98 270H679Q694 262 694 250T679 230H98Q84 237 84 250Z"></path><path stroke-width="1" id="E1-MJMAIN-31" d="M213 578L200 573Q186 568 160 563T102 556H83V602H102Q149 604 189 617T245 641T273 663Q275 666 285 666Q294 666 302 660V361L303 61Q310 54 315 52T339 48T401 46H427V0H416Q395 3 257 3Q121 3 100 0H88V46H114Q136 46 152 46T177 47T193 50T201 52T207 57T213 61V578Z"></path><path stroke-width="1" id="E1-MJMAIN-2E" d="M78 60Q78 84 95 102T138 120Q162 120 180 104T199 61Q199 36 182 18T139 0T96 17T78 60Z"></path><path stroke-width="1" id="E1-MJMAIN-37" d="M55 458Q56 460 72 567L88 674Q88 676 108 676H128V672Q128 662 143 655T195 646T364 644H485V605L417 512Q408 500 387 472T360 435T339 403T319 367T305 330T292 284T284 230T278 162T275 80Q275 66 275 52T274 28V19Q270 2 255 -10T221 -22Q210 -22 200 -19T179 0T168 40Q168 198 265 368Q285 400 349 489L395 552H302Q128 552 119 546Q113 543 108 522T98 479L95 458V455H55V458Z"></path><path stroke-width="1" id="E1-MJMAIN-36" d="M42 313Q42 476 123 571T303 666Q372 666 402 630T432 550Q432 525 418 510T379 495Q356 495 341 509T326 548Q326 592 373 601Q351 623 311 626Q240 626 194 566Q147 500 147 364L148 360Q153 366 156 373Q197 433 263 433H267Q313 433 348 414Q372 400 396 374T435 317Q456 268 456 210V192Q456 169 451 149Q440 90 387 34T253 -22Q225 -22 199 -14T143 16T92 75T56 172T42 313ZM257 397Q227 397 205 380T171 335T154 278T148 216Q148 133 160 97T198 39Q222 21 251 21Q302 21 329 59Q342 77 347 104T352 209Q352 289 347 316T329 361Q302 397 257 397Z"></path></defs><g stroke="currentColor" fill="currentColor" stroke-width="0" transform="matrix(1 0 0 -1 0 0)" aria-hidden="true"> <use xlink:href="#E1-MJMAIN-3D" x="0" y="0"></use> <use xlink:href="#E1-MJMAIN-2212" x="1056" y="0"></use><g transform="translate(1834,0)"> <use xlink:href="#E1-MJMAIN-31"></use> <use xlink:href="#E1-MJMAIN-31" x="500" y="0"></use> <use xlink:href="#E1-MJMAIN-2E" x="1001" y="0"></use> <use xlink:href="#E1-MJMAIN-37" x="1279" y="0"></use> <use xlink:href="#E1-MJMAIN-36" x="1780" y="0"></use></g></g></svg>.</p>
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<use xlink:href="#E1-MJMAIN-32" x="500" y="0"></use> <use xlink:href="#E1-MJMAIN-30" x="1001" y="0"></use></g> <use xlink:href="#E1-MJMAIN-29" x="4615" y="0"></use> <use xlink:href="#E1-MJMAIN-2F" x="5171" y="0"></use> <use xlink:href="#E1-MJMAIN-32" x="5672" y="0"></use></g></g></g> <use xlink:href="#E1-MJMAIN-D7" x="15626" y="0"></use><g transform="translate(16627,0)"> <use xlink:href="#E1-MJMAIN-31"></use> <use xlink:href="#E1-MJMAIN-30" x="500" y="0"></use> <use xlink:href="#E1-MJMAIN-30" x="1001" y="0"></use></g></g></svg>.</p>
<p> <svg class="math" xmlns:xlink="http://www.w3.org/1999/xlink" width="13.105ex" height="5.176ex" style="vertical-align: -1.838ex;" viewBox="0 -1437.2 5642.2 2228.5" role="img" focusable="false" xmlns="http://www.w3.org/2000/svg" aria-labelledby="svg_title_8"><title id="svg_title_8">equals 10 Over 125 times 100</title><defs aria-hidden="true"><path stroke-width="1" id="E1-MJMAIN-3D" d="M56 347Q56 360 70 367H707Q722 359 722 347Q722 336 708 328L390 327H72Q56 332 56 347ZM56 153Q56 168 72 173H708Q722 163 722 153Q722 140 707 133H70Q56 140 56 153Z"></path><path stroke-width="1" id="E1-MJMAIN-31" d="M213 578L200 573Q186 568 160 563T102 556H83V602H102Q149 604 189 617T245 641T273 663Q275 666 285 666Q294 666 302 660V361L303 61Q310 54 315 52T339 48T401 46H427V0H416Q395 3 257 3Q121 3 100 0H88V46H114Q136 46 152 46T177 47T193 50T201 52T207 57T213 61V578Z"></path><path stroke-width="1" id="E1-MJMAIN-30" d="M96 585Q152 666 249 666Q297 666 345 640T423 548Q460 465 460 320Q460 165 417 83Q397 41 362 16T301 -15T250 -22Q224 -22 198 -16T137 16T82 83Q39 165 39 320Q39 494 96 585ZM321 597Q291 629 250 629Q208 629 178 597Q153 571 145 525T137 333Q137 175 145 125T181 46Q209 16 250 16Q290 16 318 46Q347 76 354 130T362 333Q362 478 354 524T321 597Z"></path><path stroke-width="1" id="E1-MJMAIN-32" d="M109 429Q82 429 66 447T50 491Q50 562 103 614T235 666Q326 666 387 610T449 465Q449 422 429 383T381 315T301 241Q265 210 201 149L142 93L218 92Q375 92 385 97Q392 99 409 186V189H449V186Q448 183 436 95T421 3V0H50V19V31Q50 38 56 46T86 81Q115 113 136 137Q145 147 170 174T204 211T233 244T261 278T284 308T305 340T320 369T333 401T340 431T343 464Q343 527 309 573T212 619Q179 619 154 602T119 569T109 550Q109 549 114 549Q132 549 151 535T170 489Q170 464 154 447T109 429Z"></path><path stroke-width="1" id="E1-MJMAIN-35" d="M164 157Q164 133 148 117T109 101H102Q148 22 224 22Q294 22 326 82Q345 115 345 210Q345 313 318 349Q292 382 260 382H254Q176 382 136 314Q132 307 129 306T114 304Q97 304 95 310Q93 314 93 485V614Q93 664 98 664Q100 666 102 666Q103 666 123 658T178 642T253 634Q324 634 389 662Q397 666 402 666Q410 666 410 648V635Q328 538 205 538Q174 538 149 544L139 546V374Q158 388 169 396T205 412T256 420Q337 420 393 355T449 201Q449 109 385 44T229 -22Q148 -22 99 32T50 154Q50 178 61 192T84 210T107 214Q132 214 148 197T164 157Z"></path><path stroke-width="1" id="E1-MJMAIN-D7" d="M630 29Q630 9 609 9Q604 9 587 25T493 118L389 222L284 117Q178 13 175 11Q171 9 168 9Q160 9 154 15T147 29Q147 36 161 51T255 146L359 250L255 354Q174 435 161 449T147 471Q147 480 153 485T168 490Q173 490 175 489Q178 487 284 383L389 278L493 382Q570 459 587 475T609 491Q630 491 630 471Q630 464 620 453T522 355L418 250L522 145Q606 61 618 48T630 29Z"></path></defs><g stroke="currentColor" fill="currentColor" stroke-width="0" transform="matrix(1 0 0 -1 0 0)" aria-hidden="true"> <use xlink:href="#E1-MJMAIN-3D" x="0" y="0"></use><g transform="translate(778,0)"><g transform="translate(397,0)"><rect stroke="none" width="1621" height="60" x="0" y="220"></rect><g transform="translate(310,676)"> <use xlink:href="#E1-MJMAIN-31"></use> <use xlink:href="#E1-MJMAIN-30" x="500" y="0"></use></g><g transform="translate(60,-687)"> <use xlink:href="#E1-MJMAIN-31"></use> <use xlink:href="#E1-MJMAIN-32" x="500" y="0"></use> <use xlink:href="#E1-MJMAIN-35" x="1001" y="0"></use></g></g></g> <use xlink:href="#E1-MJMAIN-D7" x="3140" y="0"></use><g transform="translate(4140,0)"> <use xlink:href="#E1-MJMAIN-31"></use> <use xlink:href="#E1-MJMAIN-30" x="500" y="0"></use> <use xlink:href="#E1-MJMAIN-30" x="1001" y="0"></use></g></g></svg>.</p>
<p> <svg class="math" xmlns:xlink="http://www.w3.org/1999/xlink" width="5.425ex" height="2.176ex" style="vertical-align: -0.338ex;" viewBox="0 -791.3 2335.8 936.9" role="img" focusable="false" xmlns="http://www.w3.org/2000/svg" aria-labelledby="svg_title_9"><title id="svg_title_9">equals 8.0</title><defs aria-hidden="true"><path stroke-width="1" id="E1-MJMAIN-3D" d="M56 347Q56 360 70 367H707Q722 359 722 347Q722 336 708 328L390 327H72Q56 332 56 347ZM56 153Q56 168 72 173H708Q722 163 722 153Q722 140 707 133H70Q56 140 56 153Z"></path><path stroke-width="1" id="E1-MJMAIN-38" d="M70 417T70 494T124 618T248 666Q319 666 374 624T429 515Q429 485 418 459T392 417T361 389T335 371T324 363L338 354Q352 344 366 334T382 323Q457 264 457 174Q457 95 399 37T249 -22Q159 -22 101 29T43 155Q43 263 172 335L154 348Q133 361 127 368Q70 417 70 494ZM286 386L292 390Q298 394 301 396T311 403T323 413T334 425T345 438T355 454T364 471T369 491T371 513Q371 556 342 586T275 624Q268 625 242 625Q201 625 165 599T128 534Q128 511 141 492T167 463T217 431Q224 426 228 424L286 386ZM250 21Q308 21 350 55T392 137Q392 154 387 169T375 194T353 216T330 234T301 253T274 270Q260 279 244 289T218 306L210 311Q204 311 181 294T133 239T107 157Q107 98 150 60T250 21Z"></path><path stroke-width="1" id="E1-MJMAIN-2E" d="M78 60Q78 84 95 102T138 120Q162 120 180 104T199 61Q199 36 182 18T139 0T96 17T78 60Z"></path><path stroke-width="1" id="E1-MJMAIN-30" d="M96 585Q152 666 249 666Q297 666 345 640T423 548Q460 465 460 320Q460 165 417 83Q397 41 362 16T301 -15T250 -22Q224 -22 198 -16T137 16T82 83Q39 165 39 320Q39 494 96 585ZM321 597Q291 629 250 629Q208 629 178 597Q153 571 145 525T137 333Q137 175 145 125T181 46Q209 16 250 16Q290 16 318 46Q347 76 354 130T362 333Q362 478 354 524T321 597Z"></path></defs><g stroke="currentColor" fill="currentColor" stroke-width="0" transform="matrix(1 0 0 -1 0 0)" aria-hidden="true"> <use xlink:href="#E1-MJMAIN-3D" x="0" y="0"></use><g transform="translate(1056,0)"> <use xlink:href="#E1-MJMAIN-38"></use> <use xlink:href="#E1-MJMAIN-2E" x="500" y="0"></use> <use xlink:href="#E1-MJMAIN-30" x="779" y="0"></use></g></g></svg>.</p>
<h3 id="step-4.-then-we-can-use-those-values-to-determine-the-price-elasticity-of-demand">Step 4. Then, we can use those values to determine the price elasticity of demand:</h3>
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328L97 351Q94 370 83 376T38 385H20V408Q20 431 22 431L32 432Q42 433 60 434T96 436Q112 437 131 438T160 441T171 442H174V373Q213 441 271 441H277Q322 441 343 419T364 373Q364 352 351 337T313 322Q288 322 276 338T263 372Q263 381 265 388T270 400T273 405Q271 407 250 401Q234 393 226 386Q179 341 179 207V154Q179 141 179 127T179 101T180 81T180 66V61Q181 59 183 57T188 54T193 51T200 49T207 48T216 47T225 47T235 46T245 46H276V0H267Q249 3 140 3Q37 3 28 0H20V46H36Z"></path><path stroke-width="1" id="E1-MJMAIN-69" d="M69 609Q69 637 87 653T131 669Q154 667 171 652T188 609Q188 579 171 564T129 549Q104 549 87 564T69 609ZM247 0Q232 3 143 3Q132 3 106 3T56 1L34 0H26V46H42Q70 46 91 49Q100 53 102 60T104 102V205V293Q104 345 102 359T88 378Q74 385 41 385H30V408Q30 431 32 431L42 432Q52 433 70 434T106 436Q123 437 142 438T171 441T182 442H185V62Q190 52 197 50T232 46H255V0H247Z"></path><path stroke-width="1" id="E1-MJMAIN-63" d="M370 305T349 305T313 320T297 358Q297 381 312 396Q317 401 317 402T307 404Q281 408 258 408Q209 408 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<p> <svg class="math" xmlns:xlink="http://www.w3.org/1999/xlink" width="10.394ex" height="5.176ex" style="vertical-align: -1.838ex;" viewBox="0 -1437.2 4475.3 2228.5" role="img" focusable="false" xmlns="http://www.w3.org/2000/svg" aria-labelledby="svg_title_11"><title id="svg_title_11">equals negative 11.76 Over 8 </title><defs aria-hidden="true"><path stroke-width="1" id="E1-MJMAIN-3D" d="M56 347Q56 360 70 367H707Q722 359 722 347Q722 336 708 328L390 327H72Q56 332 56 347ZM56 153Q56 168 72 173H708Q722 163 722 153Q722 140 707 133H70Q56 140 56 153Z"></path><path stroke-width="1" id="E1-MJMAIN-2212" d="M84 237T84 250T98 270H679Q694 262 694 250T679 230H98Q84 237 84 250Z"></path><path stroke-width="1" id="E1-MJMAIN-31" d="M213 578L200 573Q186 568 160 563T102 556H83V602H102Q149 604 189 617T245 641T273 663Q275 666 285 666Q294 666 302 660V361L303 61Q310 54 315 52T339 48T401 46H427V0H416Q395 3 257 3Q121 3 100 0H88V46H114Q136 46 152 46T177 47T193 50T201 52T207 57T213 61V578Z"></path><path stroke-width="1" id="E1-MJMAIN-2E" d="M78 60Q78 84 95 102T138 120Q162 120 180 104T199 61Q199 36 182 18T139 0T96 17T78 60Z"></path><path stroke-width="1" id="E1-MJMAIN-37" d="M55 458Q56 460 72 567L88 674Q88 676 108 676H128V672Q128 662 143 655T195 646T364 644H485V605L417 512Q408 500 387 472T360 435T339 403T319 367T305 330T292 284T284 230T278 162T275 80Q275 66 275 52T274 28V19Q270 2 255 -10T221 -22Q210 -22 200 -19T179 0T168 40Q168 198 265 368Q285 400 349 489L395 552H302Q128 552 119 546Q113 543 108 522T98 479L95 458V455H55V458Z"></path><path stroke-width="1" id="E1-MJMAIN-36" d="M42 313Q42 476 123 571T303 666Q372 666 402 630T432 550Q432 525 418 510T379 495Q356 495 341 509T326 548Q326 592 373 601Q351 623 311 626Q240 626 194 566Q147 500 147 364L148 360Q153 366 156 373Q197 433 263 433H267Q313 433 348 414Q372 400 396 374T435 317Q456 268 456 210V192Q456 169 451 149Q440 90 387 34T253 -22Q225 -22 199 -14T143 16T92 75T56 172T42 313ZM257 397Q227 397 205 380T171 335T154 278T148 216Q148 133 160 97T198 39Q222 21 251 21Q302 21 329 59Q342 77 347 104T352 209Q352 289 347 316T329 361Q302 397 257 397Z"></path><path stroke-width="1" id="E1-MJMAIN-38" d="M70 417T70 494T124 618T248 666Q319 666 374 624T429 515Q429 485 418 459T392 417T361 389T335 371T324 363L338 354Q352 344 366 334T382 323Q457 264 457 174Q457 95 399 37T249 -22Q159 -22 101 29T43 155Q43 263 172 335L154 348Q133 361 127 368Q70 417 70 494ZM286 386L292 390Q298 394 301 396T311 403T323 413T334 425T345 438T355 454T364 471T369 491T371 513Q371 556 342 586T275 624Q268 625 242 625Q201 625 165 599T128 534Q128 511 141 492T167 463T217 431Q224 426 228 424L286 386ZM250 21Q308 21 350 55T392 137Q392 154 387 169T375 194T353 216T330 234T301 253T274 270Q260 279 244 289T218 306L210 311Q204 311 181 294T133 239T107 157Q107 98 150 60T250 21Z"></path></defs><g stroke="currentColor" fill="currentColor" stroke-width="0" transform="matrix(1 0 0 -1 0 0)" aria-hidden="true"> <use xlink:href="#E1-MJMAIN-3D" x="0" y="0"></use><g transform="translate(778,0)"><g transform="translate(397,0)"><rect stroke="none" width="3179" height="60" x="0" y="220"></rect><g transform="translate(60,676)"> <use xlink:href="#E1-MJMAIN-2212" x="0" y="0"></use><g transform="translate(778,0)"> <use xlink:href="#E1-MJMAIN-31"></use> <use xlink:href="#E1-MJMAIN-31" x="500" y="0"></use> <use xlink:href="#E1-MJMAIN-2E" x="1001" y="0"></use> <use xlink:href="#E1-MJMAIN-37" x="1279" y="0"></use> <use xlink:href="#E1-MJMAIN-36" x="1780" y="0"></use></g></g> <use xlink:href="#E1-MJMAIN-38" x="1339" y="-687"></use></g></g></g></svg>.</p>
<p> <svg class="math" xmlns:xlink="http://www.w3.org/1999/xlink" width="6.588ex" height="2.176ex" style="vertical-align: -0.338ex;" viewBox="0 -791.3 2836.3 936.9" role="img" focusable="false" xmlns="http://www.w3.org/2000/svg" aria-labelledby="svg_title_12"><title id="svg_title_12">equals 1.47</title><defs aria-hidden="true"><path stroke-width="1" id="E1-MJMAIN-3D" d="M56 347Q56 360 70 367H707Q722 359 722 347Q722 336 708 328L390 327H72Q56 332 56 347ZM56 153Q56 168 72 173H708Q722 163 722 153Q722 140 707 133H70Q56 140 56 153Z"></path><path stroke-width="1" id="E1-MJMAIN-31" d="M213 578L200 573Q186 568 160 563T102 556H83V602H102Q149 604 189 617T245 641T273 663Q275 666 285 666Q294 666 302 660V361L303 61Q310 54 315 52T339 48T401 46H427V0H416Q395 3 257 3Q121 3 100 0H88V46H114Q136 46 152 46T177 47T193 50T201 52T207 57T213 61V578Z"></path><path stroke-width="1" id="E1-MJMAIN-2E" d="M78 60Q78 84 95 102T138 120Q162 120 180 104T199 61Q199 36 182 18T139 0T96 17T78 60Z"></path><path stroke-width="1" id="E1-MJMAIN-34" d="M462 0Q444 3 333 3Q217 3 199 0H190V46H221Q241 46 248 46T265 48T279 53T286 61Q287 63 287 115V165H28V211L179 442Q332 674 334 675Q336 677 355 677H373L379 671V211H471V165H379V114Q379 73 379 66T385 54Q393 47 442 46H471V0H462ZM293 211V545L74 212L183 211H293Z"></path><path stroke-width="1" id="E1-MJMAIN-37" d="M55 458Q56 460 72 567L88 674Q88 676 108 676H128V672Q128 662 143 655T195 646T364 644H485V605L417 512Q408 500 387 472T360 435T339 403T319 367T305 330T292 284T284 230T278 162T275 80Q275 66 275 52T274 28V19Q270 2 255 -10T221 -22Q210 -22 200 -19T179 0T168 40Q168 198 265 368Q285 400 349 489L395 552H302Q128 552 119 546Q113 543 108 522T98 479L95 458V455H55V458Z"></path></defs><g stroke="currentColor" fill="currentColor" stroke-width="0" transform="matrix(1 0 0 -1 0 0)" aria-hidden="true"> <use xlink:href="#E1-MJMAIN-3D" x="0" y="0"></use><g transform="translate(1056,0)"> <use xlink:href="#E1-MJMAIN-31"></use> <use xlink:href="#E1-MJMAIN-2E" x="500" y="0"></use> <use xlink:href="#E1-MJMAIN-34" x="779" y="0"></use> <use xlink:href="#E1-MJMAIN-37" x="1279" y="0"></use></g></g></svg>.</p>
<p>Therefore, the elasticity of demand from G to is H 1.47. The magnitude of the elasticity has increased (in absolute value) as we moved up along the demand curve from points A to B. Recall that the elasticity between these two points was 0.45. Demand was inelastic between points A and B and elastic between points G and H. This shows us that price elasticity of demand changes at different points along a straight-line demand curve.</p>
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