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Economics

The makers of academic books find that, when they raise the price of the average hard copy book from $50 to $75, quantity demanded among students drops from 100 to 90. Among casual readers, quantity demanded drops from 80 to 40.

a. Calculate the price elasticity of demand for each group.

b. Is demand price elastic or price inelastic for each group?

c. Using the determinants of demand, explain why there is a difference in elasticity for each group.

d. Do you think the price elasticity of demand for students would change if the number of students using e texts increased? Why?

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Microeconomics, Economics

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