If a 20 percent decrease in the price of chicken results in a 10 percent increase in the quantity demanded,the price elasticity of demand has a value of
A)0.5
B)2
C)1
D)0.1
E)none of these

Question

Quizplus · Accepted Answer

Price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is 10% / -20% = -0.5. The absolute value is 0.5.

If a 20 Percent Decrease in the Price of Chicken