what is the elasticity coeeficient?

Question

consider the following supply schedule: price is 10,8,6,4,2,0 and the quantity supplied is 50,40,30,20,10,0..what is the elasticity coefficient?

Answer 1

The elasticity coefficient in this case is 5. 50/10=5 40/8=5 etc etc all of them equal five.

Since it is greater than 1 the demand is elastic.

If the coefficient of elasticity of demand is a number greater than one, we say demand is elastic; if the coefficient is less than one, we say demand is inelastic. In other words, the quantity demanded is “relatively responsive” when Ed is greater than 1 and “relatively unresponsive” when Ed is less than 1. A special case is if the coefficient equals one; this is called unit elasticity.