Table4-2 Price and Quantity Information Underlying Data of
Table4-1
For similar reasons, knowing the change in the quantity demanded is not
very revealing unless the initial quantity demanded is also known. An
increase of 7500 kilograms is quite a significant change if the quantity
formerly bought was 15 000 kilograms, but it is insignificant if the
quantity formerly bought was 10 million kilograms.
Table 4-2 shows the original and new levels of price and quantity. Note
that it also shows the average price and average quantity. These averages
will be necessary for our computation of elasticity.
These data provide the appropriate context for the data given in Table
4-1. The table relates the $2 per-unit price reduction of each product to
the actual prices and quantities demanded.