Question

he table shows information on demand for ordinary gummy bears and their sugar-free version. Price Sugar-free gummy bears demanded Regular gummy bears demanded ($ per kg) (thousands of kg) (thousands of kg) $2.00 181 485 $2.40 175 379 $2.80 157 273 $3.20 137 155 Use the midpoint method to compute the price elasticities as the price rises from $2.40 to $2.80. Specify the answers to o decimal place. elasticity of demand of sugar-free gummy bears: elasticity of demand of regular gummy bears:

Answer 1

P,=$2.40 P2 =42.80 11 elushity of demand for sugar free 9,= 175 Q=157 Eda (02-817 /[ Q4+0/2] TB-P17 | 4+2.7-127 Ed = 1915, timin - 157-175 (1st ti77 = 32 222 2.80 -2.40 12.do t2.40) 332 6.40 5.20 = -0.70481 Ed = +0.7 27 Elasticity of demand for regular gummy 0 => 379 02 = 273 El= (02-012/[Qx+60112] – 223- 379 The po late 12] 273-379 652 237 379 2.10-240 0-40 5.20 2.fot 2.40 = - 0.11903 - Ed=-0.1