Need double check on Price Elasticity Please

[Kaleb]

[SOLVED] Need double check on Price Elasticity Please

Question:
If the price of soda doubles from $1.00 per can to $2.00 per can and you buy the same amount, what is your price elasticity of demand for soda, and is it considered elastic or inelastic.

Formula:
% of Change in Quantity of Demand / % of Change in Price

Attempt:
I figure since the demand is the same the formula is 1/.5 = 2.0 So its inelastic correct?

I know this is a stretch on the forum considering its more economics. But this forum never let's me down :)

 

[CRGreathouse]

Yes, your demand is perfectly inelastic over that price range. (It might not be perfectly inelastic if it went to a million dollars. :p.)

 

[HallsofIvy]

Question:
If the price of soda doubles from $1.00 per can to $2.00 per can and you buy the same amount, what is your price elasticity of demand for soda, and is it considered elastic or inelastic.

Formula:
% of Change in Quantity of Demand / % of Change in Price

Attempt:
I figure since the demand is the same the formula is 1/.5 = 2.0 So its inelastic correct?

I know this is a stretch on the forum considering its more economics. But this forum never let's me down :)

If "you buy the same amount" why is the "% of Change in Quantity of Demand" equal to 1? I would have thought the change was 0. Also if "If the price of soda doubles from $1.00 per can to $2.00 per can" why is the "% of Change in Price" 0.5? I would have thought it would be 100%.