If the absolute value of the price elasticity of demand for tickets to a football game is 2, then if the price increases by 1 percent, quantity demanded decreases by:
A)0.5 percent.
B)1 percent.
C)2 percent.
D)4 percent.

Question

Quizplus · Accepted Answer

The price elasticity of demand is the percentage change in quantity demanded divided by the percentage change in price, so if the price elasticity of demand is 2, then a 1 percent increase in price must lead to a 2 percent decrease in quantity demanded.

If the Absolute Value of the Price Elasticity of Demand