Question 1182871
number 1:


the disposable income increases from 5000 to 15000.
the demand for milk and milk goods has increased from 30 liters to 60 liters per month.


percent change in demand = (60 - 30) / 30 = 30 / 30 = 1 * 100 = 1005.


percent change in income = (15000 - 5000) / 5000 = 10000 / 5000 = 2 * 100 = 200%.


the price elasticity of demand = percent change in demand divided by percent change in income = 100 / 200 = .5


what this says is that the percent increase in demand will be 50% of the percent increase in income.


number 2:


percent change in demand = 7 - 1.75 = 5.25 / 1.75 = 3 * 100 = 300%.


percent change in price = 60 - 100 = -40 / 100 = -.4 * 100 = -40%.%


price elasticity of demand = percent change in demand divided by percent change in price = 300 / -40 = -7.5.


what this says is that, if the price goes up 40%, the demand goes down 750%.


here's a reference on elasticity of demand that might be helpful.


<a href = "https://www.economicshelp.org/blog/7019/economics/examples-of-elasticity/" target = "_blank">https://www.economicshelp.org/blog/7019/economics/examples-of-elasticity/</a>


check my figures to see if they're accurate.
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.


here's another reference that goes into it a bit further.


<a href = "https://investinganswers.com/dictionary/e/elasticity" target = "_blank">https://investinganswers.com/dictionary/e/elasticity</a>