Respuesta :
The elasticity of demand for the newspaper is 0.3
What is the elasticity of demand?
The elasticity of demand is a economy concept where the demand for a good changes because of the changes with the price of the good. The elasticity of demand could be calculated by comparing the precentage change in demand with the precentage change in price.
If the elasticity of demand is less than 1, it means that the demand is inelastic to the price change. If the elasticity of demand is more than 1, we could conclude that the demand is elastic to any price change.
Elasticity of demand = Percentage change of Demand
Percentage change of Price
If we know 2 points of prices and quantity demanded associated with those two points of price, we could use The Midpoint Formula to find The Elasticity of Demand. The Midpoint Formula could be written as:
E = [tex]\frac{\frac{(q2-q1)}{(q1+q2)/2} }{\frac{(p2-p1)}{(p1+p2)/2} }[/tex]
Based on the question, we could rewrite the information into the following form:
p1 = 50 cents
p2 = 30 cents
q1 = 240,000
q2 = 280,000
We then could calculate the Elasticity of Demand using the Midpoint formula:
E = [tex]\frac{\frac{280,000-240,000}{(240,000+280,000)/2} }{\frac{30-50}{(50+30)/2} }[/tex]
E = [tex]\frac{\frac{40,000}{520,000/2} }{\frac{-20}{80/2} }[/tex]
E = [tex]\frac{\frac{40,000}{260,000}}{\frac{-20}{40}}[/tex]
E = [tex]\frac{40,000}{260,000}[/tex] × [tex]\frac{40}{-20}[/tex]
E = -0.3
Since the negative sign could be neglected, we could condlude that the elasticity of demand for this newspaper is 0.3 (inelastic).
Learn more about The elasticity of demand here: http://brainly.com/question/28945373?referrer=searchResults
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