If the price of cheese falls by 1 percent and the quantity demanded rises by 3 percent, then the price elasticity of demand for cheese is equal to:
A)30.
B)0.30.
C)0.333.
D)3.

Question

Quizplus · Accepted Answer

The price elasticity of demand is the percentage change in quantity demanded divided by the percentage change in price, here +3/-1 = -3. By convention, the price elasticity of demand is expressed in terms of its absolute value.

If the Price of Cheese Falls by 1 Percent and the Quantity