To calculate the elasticity of demand, we can use the formula for price elasticity of demand (PED):
\[ \text{PED} = \frac{%\text{ change in quantity demanded}}{%\text{ change in price}} \]
However, we need the change in quantity demanded along with the percentage change in price along with corresponding quantities at those prices for an accurate calculation.
If specific quantities are not provided, the average value or the numbers from a graph or table would typically be necessary to ascertain the percentage changes. Given the absence of such data, I can't compute the PED accurately based on the information provided.
In practice, you would calculate the percentage change by using the starting price and the new price (and corresponding quantities). Here’s how you would do it step-by-step if you had those numbers:
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Calculate the change in price: \( \Delta P = P_{\text{final}} - P_{\text{initial}} = 0.40 - 2.00 = -1.60 \)
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Calculate the average price: \( P_{\text{average}} = \frac{P_{\text{initial}} + P_{\text{final}}}{2} = \frac{2.00 + 0.40}{2} = 1.20 \)
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Calculate the percentage change in price: \[ %\text{ change in price} = \frac{\Delta P}{P_{\text{average}}} = \frac{-1.60}{1.20} \approx -1.33 \text{ (or -133%)} \]
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Similarly, you would need quantity data to find the percentage change in quantity demanded and then plug it into the PED formula.
Given the options you provided (0.004, 5, 0.2, and 0.5), if you have any additional details or the underlying quantities, we can refine our calculations accordingly. Please provide that information if possible!
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