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Answer :
The price elasticity of demand for pork in this scenario is inelastic, as an increase in price leads to a proportionally smaller increase in quantity demanded. A 1% increase in price results in a less than 1% increase in quantity demanded.
The price elasticity of demand measures the responsiveness of quantity demanded to changes in price. In this case, when the price of pork increases by Php. 14.00, the quantity demanded increases by 200 kilos. We can calculate the price elasticity of demand using the formula:
Price Elasticity of Demand = (% change in quantity demanded) / (% change in price)
We have the following information:
Change in quantity demanded = 200 kilos
Change in price = Php. 14.00
Using these values, we can calculate the percentage changes:
% change in quantity demanded = (Change in quantity demanded / Initial quantity demanded) * 100
% change in quantity demanded = (200 / 350) * 100 ≈ 57.14%
% change in price = (Change in price / Initial price) * 100
% change in price = (14 / 140) * 100 = 10%
Now, we can calculate the price elasticity of demand:
Price Elasticity of Demand = (% change in quantity demanded) / (% change in price)
Price Elasticity of Demand = 57.14% / 10% = 5.714
Since the price elasticity of demand is greater than 1, but less than infinity, we can classify it as inelastic. This means that the quantity demanded is relatively unresponsive to changes in price. A 1% increase in price leads to less than a 1% increase in quantity demanded.
the increase in the price of pork by Php. 14.00 leads to an increase in quantity demanded by 200 kilos. However, the price elasticity of demand indicates that the response in quantity demanded is relatively small compared to the change in price. This suggests that consumers are less sensitive to price changes and continue to demand pork even at higher prices.
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