A. Instructions: Compute the elasticity, interpret, and determine the type of demand elasticity.
1. P1 = 2.50 P2 = 3 QD1 = 3,000 QD2 = 1,800
2. P1 = 400 P2 = 300 QD1 = 60,000 QD2 = 75,000
3. Company X is planning to increase the price of its product by 12.5% from 200 pesos. If
this happens the demand for it is expected to decrease from 40,000 units to 38,000 units.
Is the plan valid? Why? Compute the elasticity and interpret.
4. Company Y’s President and CEO wants to increase the price from P 500 by P 100 per
