diferent You can calculate the elasticity at both points and at the average point between the two years: 820-857)=-043 411 =P49.376 Q△P850 85.7)=-0.38 ,+ EE 2_3935(-85.7)=-0.40 0o7+0os AP 835 2 To derive the demand curve for roasted coffee Q=a-bP,note that the slpe of the demand curve is-85.7=-b.To find the coefficient a,use either of the data points from the table above so that a=830+85.7*4.11=1172.3 or a=850+85.7*3.76=1172.3.The equation for the demand curve is therefore Q=1172.385.7 b.Now estimate the short-run price elasticity of demand for instant coffee Derive a linear demand curve for instant coffee. To find elasticity,you must first estimate the slope ofthe demand curve 75-70 P-10.35-10,48=-0.i3-38.5 Given the slope,we can now estimate elasticity using the price and quantity data from the above table.Since the demand curveQa-bP is assumed to be linear,theela will differ in 1997 and 1998 be e price and quantity are different You can calculate the elasticity at both points an at the average point between the two years: g-10g538=-531 O△P 75 Eg”=A2-1048-38=-576 Q△P 70 △010.415 =2-2385=-55 To derive the demand curve for instant coffee,note that the slope of the demand curve is-38.5=-b.To find the coefficient a.use either ofthe data Th equat ion fo rthe demand curve is thereforedifferent. You can calculate the elasticity at both points and at the average point between the two years: Ep 9 7 = P Q Q P = 4.11 820 (−85.7) = −0.43 Ep 9 8 = P Q Q P = 3.76 850 (−85.7) = −0.38 Ep AVE = P9 7 + P9 8 2 Q9 7 + Q9 8 2 Q P = 3.935 835 (−85.7) = −0.40. To derive the demand curve for roasted coffee Q=a-bP, note that the slope of the demand curve is -85.7=-b. To find the coefficient a, use either of the data points from the table above so that a=830+85.7*4.11=1172.3 or a=850+85.7*3.76=1172.3. The equation for the demand curve is therefore Q=1172.3-85.7P. b. Now estimate the short-run price elasticity of demand for instant coffee. Derive a linear demand curve for instant coffee. To find elasticity, you must first estimate the slope of the demand curve: Q P = 75 − 70 10.35 −10.48 = − 5 0.13 = −38.5. Given the slope, we can now estimate elasticity using the price and quantity data from the above table. Since the demand curve Q=a-bP is assumed to be linear, the elasticity will differ in 1997 and 1998 because price and quantity are different. You can calculate the elasticity at both points and at the average point between the two years: Ep 9 7 = P Q Q P = 10.35 75 (−38.5) = −5.31 Ep 9 8 = P Q Q P = 10.48 70 (−38.5) = −5.76  Ep AVE = P9 7 + P9 8 2 Q9 7 + Q9 8 2 Q P = 10.415 72.5 (−38.5) = −5.53. To derive the demand curve for instant coffee, note that the slope of the demand curve is -38.5=-b. To find the coefficient a, use either of the data points from the table above so that a=75+38.5*10.35=473.5 or a=70+38.5*10.48=473.5. The equation for the demand curve is therefore