Suppose the following table gives data on the price of rye and the number of bushels of rye sold in 2010 and 2011.
Year Price/bushel Quantity (bushels)
2010 $3.00 8 million
2011 $2.00 14 million
- Calculate the price elasticity of demand for rye.
- Is the demand for rye elastic or inelastic? Explain
- Based on the calculated elasticity figure you can say that if price of rye increased by 10 percent, quantity of rye sold will fall by _____________ percent.