Economics - Old Questions
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5. Consider the following table:
| Combination | A | B | C | D | E | F | G |
|---|---|---|---|---|---|---|---|
| Price (Rs.) | 7 | 6 | 5 | 4 | 3 | 2 | 1 |
| Quantity (Units) | 500 | 750 | 1250 | 2000 | 3250 | 4750 | 8000 |
a. Find the price elasticity of demand for movement from points A to C and C to A by the proportional method.
b. Compute the price elasticity of demand at the midway between A to C and C to A by the arc method. [5]
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