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    synlgar's Avatar
    synlgar Posts: 1, Reputation: 1
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    #1

    Feb 2, 2009, 08:18 PM
    Calculate the price elasticity of demand
    Calculate the following. Wendy’s Wheels sells bicycles. At a price of $160 per bicycle, Wendy’s sells 40 bicycles per month. When it lowered its price to $150, sales rose to 48 bicycles per month.

    Calculate the Price Elasticity of Demand of Wendy’s Wheels
    kurtwz's Avatar
    kurtwz Posts: 16, Reputation: 1
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    #2

    Mar 7, 2009, 03:24 PM

    =% change in quantity / % change in price or
    [(48 - 40) / 40 = .2] / [(150 - 160) / 160 = -.0625]
    = .2/-.0625 = -3.2
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