when the price movie tickets increases from $15 to $25, the quantity of movie tickets sold decreases from 30 to 20. calculate the absolute value of the price elasticity of demand using this information.

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Answer 1

Answer:

The absolute value of the price elasticity of demand is 0.5.

Price elasticity of demand is a measure of the change in demand for a commodity in response to a change in price. When the price of movie tickets rises from $15 to $25, the quantity of movie tickets sold decreases from 30 to 20.Using this information, we can calculate the absolute value of the price elasticity of demand as follows:

Absolute value of the price elasticity of demand=Percentage change in quantity demanded/Percentage change in price. To calculate the percentage change in quantity demanded, we use the following formula:

Percentage change in quantity demanded

=((new quantity demanded - old quantity demanded)/old quantity demanded) x 100

Percent change in quantity demanded=((20-30)/30) x 100Percent change in quantity demanded=-33.33%

To calculate the percentage change in price, we use the following formula: Percentage change in price

=((new price - old price)/old price) x 100

Percent change in price=((25-15)/15) x 100

Percent change in price=66.67%

Now we can substitute these values into the formula for the absolute value of the price elasticity of demand.

Absolute value of the price elasticity of demand=Percentage change in quantity demanded/Percentage change in price

Absolute value of the price elasticity of demand=|-33.33/66.67|. Absolute value of the price elasticity of demand=0.5.

To know more price elasticity of demand, refer here:

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Tim worker went to his bank. He deposited $72.15 and the teller credited $5.79 to his account for interest. If Tim's initial balance was $1,226.14, what will his new balance be?

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Hi, given the question let us breakdown the given items:
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