Morales, Diana H. Mr.

Ronal Quinto

BPA 1B MICROECONOMICS

Elasticity Problem

1. Hypothetical Schedule of demand and supply of brown sugar per day.

Quantity Demanded per kgs. Price/kg. of sugar Quantity Supplied kgs. Per
Per day day
6,400 15.75 2, 500

5,200 16.50 3, 600

4,500 18.25 4, 800

a. What is the elasticity of demand between the prices Php 15.75 and Php 18.25 per kilogram?
Identify your answer as to elastic, inelastic or unit elastic. INELASTIC

b. What is the elasticity supply between the prices Php 16.50 and Php 18.25 per kilogram? Identify

your answer as to elastic, inelastic or unit elastic. INELASTIC

2. The price of product A increased from Php20 to Php40. The demand for product B went up to
100 to 200. Calculate he cross price elasticity of demand. Determine if the good is complimentary
or substitute. SUPLEMANTARY

3. The income of Mr. dela Cruz increased from Php300 to Php450 a day. His demand for grocery
items increased from 200 to 500. Compute for the income elasticity of demand of Mr. dela Cruz.

-0.55 INELASTIC
4. Suppose that when the store increases the price of peanut butter from 120 pesos to 150 pesos,
quantity demanded decreased from 210 to 140. What is the change in total revenue as a result of
this price change?

0.8 OR 9 PERFECTLY ELASTIC