document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1182871>Question 1182871</A>: <I><SPAN STYLE=\"word-break: break-all;\"> 1.<BR>\n" );
document.write( "The disposable income of Mehta family increases from Rs 5000 to Rs 15,000. As a result, the family‘s demand for milk and milk goods has increased from 30 liters to 60 liters per month. Calculate the income elasticity of demand.\r<BR>\n" );
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document.write( "A drop in the price of lemons from Rs 100 per kg to Rs 60 Per Kg increases the quantity demanded from 1.75 to 7 kg per week. Calculate the price elasticity of demand. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #813524 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=813524\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> number 1:\r<BR>\n" );
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document.write( "the disposable income increases from 5000 to 15000.<BR>\n" );
document.write( "the demand for milk and milk goods has increased from 30 liters to 60 liters per month.\r<BR>\n" );
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document.write( "percent change in demand = (60 - 30) / 30 = 30 / 30 = 1 * 100 = 1005.\r<BR>\n" );
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document.write( "percent change in income = (15000 - 5000) / 5000 = 10000 / 5000 = 2 * 100 = 200%.\r<BR>\n" );
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document.write( "the price elasticity of demand = percent change in demand divided by percent change in income = 100 / 200 = .5\r<BR>\n" );
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document.write( "what this says is that the percent increase in demand will be 50% of the percent increase in income.\r<BR>\n" );
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document.write( "number 2:\r<BR>\n" );
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document.write( "percent change in demand = 7 - 1.75 = 5.25 / 1.75 = 3 * 100 = 300%.\r<BR>\n" );
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document.write( "percent change in price = 60 - 100 = -40 / 100 = -.4 * 100 = -40%.%\r<BR>\n" );
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document.write( "price elasticity of demand = percent change in demand divided by percent change in price = 300 / -40 = -7.5.\r<BR>\n" );
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document.write( "what this says is that, if the price goes up 40%, the demand goes down 750%.\r<BR>\n" );
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document.write( "here's a reference on elasticity of demand that might be helpful.\r<BR>\n" );
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document.write( "<a  rel=nofollow HREF= \"https://www.economicshelp.org/blog/7019/economics/examples-of-elasticity/\" target = \"_blank\">https://www.economicshelp.org/blog/7019/economics/examples-of-elasticity/</a>\r<BR>\n" );
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document.write( "check my figures to see if they're accurate.<BR>\n" );
document.write( "i think they are, but i just learned about what elasticity of demand means and i made my figures based on what the reference was saying.\r<BR>\n" );
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document.write( "here's another reference that goes into it a bit further.\r<BR>\n" );
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document.write( "<a  rel=nofollow HREF= \"https://investinganswers.com/dictionary/e/elasticity\" target = \"_blank\">https://investinganswers.com/dictionary/e/elasticity</a>\r<BR>\n" );
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document.write( " </SPAN>\n" );
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