MICRO - MOD 5 - CH 6 - HW

If you compute the price elasticity of demand using a quantity of tickets from 1 to 8 and using a quantity of tickets from 1,000 to 8,000, the value of the price elasticity of demand is multiple choiceequal to one in both cases.smaller when values from 1,000 to 8,000 are used because these values are larger than units 1 to 8.larger when values from 1,000 to 8,000 are used because these values are larger than units 1 to 8.the same because the percentage change in quantity demanded will remain the same. Correct Explanation The price elasticity of demand is determined by comparing the percentage change in price and the percentage change in quantity demanded. The percentage change in quantity demanded will remain the same regardless of whether the difference is between 1 unit and 8 units or 1,000 units and 8,000 units. To see this, note that the percentage change between 1 and 2 equals [(2 − 1)/1] × 100 = 100 percent. The percentage change between 1,000 and 2,000 equals [(2,000 − 1,000)/1,000] × 100 = 100 percent. Since these are the same for a given percentage change in price, the elasticities will be the same.

The same because the percentage change in quantity demanded will remain the same. Correct