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Elasticity Of Demand

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Thus we get a different value for E
If we move from B to D, then if we move from D to B
Those difference result because we used a different base
In computing the percentage change in each case
We can avoid getting different results by using the

Average of the two price and the average of two quantities
Instead of either Pb and Qd or Pd and Qd in the formula to find E
Applying this modified formula to find E either for a movement
From B to D or for a movement from D to B
Think About Of Dinner?

Since exy is possitive, tea and coffe are subtitutes
Since exz is negative tea and lemons are compliment
Problems 324 provides some empirical estimates of price
Income, and cross elasticity of demand…

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