Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 5 - Elasticity: A Measure of Responsiveness - Exercises - 5.2 Using Price Elasticity - Page 122: 2.12

Answer

Demand for medical care would decrease by 6.7% for poor households but only 0.3% for wealthy households.

Work Step by Step

$\Delta\ qty=\Delta\ price\times E_d$ $\Delta\ qty=10\times0.67$ $\Delta\ qty=6.7\%$ $\Delta\ qty=\Delta\ price\times E_d$ $\Delta\ qty=10\times0.03$ $\Delta\ qty=0.3\%$
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