According to Duffy-Deno (2003), when the price of broadband access capacity (the amount of information one can send over an internet connection) increases 10%, commercial customers buy about 3.8% less capacity. What is the elasticity of demand for broadband access capacity for firms? The elasticity of demand is nothing. (Enter a numeric response using a real number rounded to two decimal places.)

Question

Asher Morris

Business

18 September, 15:41

According to Duffy-Deno (2003), when the price of broadband access capacity (the amount of information one can send over an internet connection) increases 10%, commercial customers buy about 3.8% less capacity. What is the elasticity of demand for broadband access capacity for firms? The elasticity of demand is nothing. (Enter a numeric response using a real number rounded to two decimal places.)

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Answers (1)

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Tamia Randolph · Answer 1

Answer: - 0.38

Explanation:

Price elasticity of demand is a term on economics which measures the change in the quantity demanded of a particular good or service in relation to its price change. It is used to determine the changes in demand due to changes in price and to understand how the real economy works.

Expressed mathematically, price elasticity of demand is:

Price elasticity of demand = % change in quantity demanded / % change in price

Price elasticity of demand = - 3.8 / 10 = -0.38

Therefore, the price elasticity if demand is - 0.38.