#### Occupational Health and Safety, Canadian Edition

15th Edition
by David L. Goetsch, University of West Florida and Oskaloosa-Walton Eugene Ozon, Algonquin College
1035 Solutions 49 Chapters 1448 Studied ISBN: 0133450244 5 (1)

#### Chapters 6: DQ 1

DISCUSSION QUESTIONS

1. Explain why the choice between 1, 2, 3, 4, 5, 6, 7, and 8 â€œunits,â€ or 1,000, 2,000, 3,000, 4,000, 5,000, 6,000, 7,000 and 8,000 movie tickets, makes no difference in determining elasticity in Table 6.1.

#### Step-By-Step Solution

DISCUSSION QUESTIONS

1. Explain why the choice between 1, 2, 3, 4, 5, 6, 7, and 8 â€œunits,â€ or 1,000, 2,000, 3,000, 4,000, 5,000, 6,000, 7,000 and 8,000 movie tickets, makes no difference in determining elasticity in Table 6.1.

Answer: Price elasticity of demand is determined by comparing the percentage change in price and the percentage change in quantity demanded. The percentage change in quantity will remain the same regardless of whether the difference is between 1 unit and 2 units or 1000 units and 2000 units.

To see this note that the percentage change between 1 and 2 equals ((2-1)/1) x 100 = 100%. The percentage change between 1000 and 2000 equals ((2000-1000)/1000) x 100=100%. Since these are the same for a given percentage change in price the elasticities will be the same.

This is also true if you use the midpoints formula. In this case, that the percentage change between 1 and 2 equals ((2-1)/((1+2)/2)) x 100(1/1.5) x 100 = 67%. The percentage change between 1000 and 2000 equals ((2000-1000)/((1000+2000)/2) x 100 = (1000/1500) x 100 = 67%.