1. Test Yourself
Calculate the arc own price elasticity of demand between the points A and B?
Is the elasticity different if your go from B to A?
Elastic, inelastic, or unit? Why?
If at point B and your goal is to increase revenues should you increase or decrease price? A B

2. Test Yourself A B Answers (4/6)/(-2/8)= -2.667 No Elastic
Calculate the arc own price elasticity of demand between the points B and A?
Is the elasticity different if you go from A to B?
Elastic, inelastic, or unit? Why?
If at point B and your goal is to increase revenues should you increase or decrease price? A B
Answers
(4/6)/(-2/8)= No
Elastic
Decrease price

3. Test Yourself
The calculated own price elasticity of demand for salt is -0.1, whereas, the elasticity for fresh green peas is Why is salt more inelastic than fresh green peas?
The short-run and long-run own price elasticities for gasoline are -0.2 and Why the difference?

4. Test Yourself
The calculated own price elasticity of demand for salt is -0.1, whereas, the elasticity for fresh green peas is Why is the salt elasticity more inelastic than fresh green peas?
The short-run and long-run own price elasticities for gasoline are -0.2 and Why the difference?
Salt has fewer substitutes, is required to live, and is a very small percentage of total income.
Long-run elasticities are more elastic as consumers have time to adjust their consumption bundles.