Ask Question
BusinessBusiness
14 February, 07:04

Rain spoils the strawberry crop, the price of strawberries rises from $2 to $4 a box, and the quantity demanded decreases from 1 comma 400 to 1 comma 000 boxes a week. Calculate the price elasticity of demand over this price range. Describe the demand for strawberries.

+2
Answers (1)
  1. 14 February, 07:22
    0
    a. Price elasticity of demand is 3.5.

    b. Demand for strawberries elastic.

    Explanation:

    a. Calculate the price elasticity of demand over this price range.

    Price elasticity of demand can be calculated as the percentage change in price divided by percentage change in quantity demanded.

    We can therefore proceed as follows:

    Percentage change in price = [ (4 - 2) : 2] * 100 = 100%

    Percentage change in quantity demanded = [ (1,400 - 1,000) : 1,400] * 100 = 28.57%

    Price elasticity of demand = 100% : 28.57% = 3.5

    Therefore, the price elasticity of demand over this price range is 3.5.

    b. Describe the demand for strawberries.

    Since the calculated price elasticity of demand of 3.5 is greater 1, this implies that demand for strawberries elastic. That is, customers are sensitive and more responsive to the change in price of strawberries.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Rain spoils the strawberry crop, the price of strawberries rises from $2 to $4 a box, and the quantity demanded decreases from 1 comma 400 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
What's the meaning of marginal investor?
Answers (1)
Bolander Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours.
Answers (1)
Consider the given simple economy. Sheepnip Co. makes sheep feed. Better-bald Inc. purchases sheep feed for the sheep it raises and sells wool. Sweeter Sweaters Inc. makes and sells wool sweaters. Sheepnip Co. Better-bald Inc. Sweeter Sweaters Inc.
Answers (1)
Key question addressed by strategic management is "Why do some firms outperform other firms?" In other words, it examines how actions and events involving top executives, firms and industries influence a firm's success or failure?
Answers (1)
Consumers are willing to pay more for a product if they perceive the brand as better there are many comparable products it is a complementary product their friends have had a negative experience with it i chose a but it could be c too i dont know
Answers (1)
New Questions in Business
Non-trade receivables should be reported separately from trade receivables. Why is this statement either true or false? A) It is true because trade receivables are current assets and non-trade receivables are long term.
Answers (1)
In general, a visionary organization asks what three types of questions to specify its foundation, set a direction, and formulate strategies? why, when, where what, by whom, how why, what, how how, when, where who, why, when
Answers (1)
The United States wanted overseas territories because the territories had A) access to ports. B) customers who would buy U. S. products. C) connections with European nations. D) access to raw materials.
Answers (1)
On January 1, Puckett Company paid $1.71 million for 57,000 shares of Harrison's voting common stock, which represents a 40 percent investment. No allocation to goodwill or other specific account was made.
Answers (1)
I'm always cramming to hand in an assignment or take an exam.
Answers (2)
Home » Business » Rain spoils the strawberry crop, the price of strawberries rises from $2 to $4 a box, and the quantity demanded decreases from 1 comma 400 to 1 comma 000 boxes a week. Calculate the price elasticity of demand over this price range.
Sign Up Forgot Password?