1. Suppose that the current price of a shucked ear of corn atthe local grocery store is $1 but last.

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1. Suppose that the current price of a shucked ear of corn atthe local grocery store is $1 but last spring it was $1.50. Themanager is your brother-in-law and he informs you that 1200 earswere sold this week, better than the 1000 that were sold during oneparticular week last spring when the price was $1.50. Use the pointformula to calculate the price elasticity of demand for ears ofcorn. Based solely on your calculation, is the demand relativelyelastic or relatively inelastic? Is this a change in demand or achange in the quantity demanded? Explain in a few sentences.

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