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Homework answers / question archive / If the the time of a doctor's visit decreases from 86 minutes to 38 minutes and the amount consumers choose to buy increases from 17 to 23, what is the time elasticity of demand? Do not forget to include the sign
If the the time of a doctor's visit decreases from 86 minutes to 38 minutes and the amount consumers choose to buy increases from 17 to 23, what is the time elasticity of demand? Do not forget to include the sign.
ROUND YOUR ANSWER TO EXACTLY TWO DECIMAL PLACES
Computation of Time Elasticity of Demand:
Time Elasticity of Demand = % Change in Time/ %Change in Amount
Here,
% Change in Time = (38 minutes - 86 minutes)/86 minutes = -0.56
% Change in Amount = ($23 - $17)/$17 = 0.35
Time Elasticity of Demand = -0.56/0.35 = -1.58
