If the price elasticity of demand for peaches is 1.8 and the price elasticity of demand for apples is 1.6,then consumers are
A)more sensitive to a change in the price of apples than they are to a change in the price of peaches.
B)more sensitive to a change in the price of peaches than they are to a change in the price of apples.
C)more likely to substitute strawberries for peaches than for apples.
D)more likely to substitute strawberries for apples than for peaches.
E)eating more peaches than apples.

Question

Quizplus · Accepted Answer

The higher the price elasticity of demand, the more sensitive consumers are to a change in price. Therefore, since the price elasticity of demand for peaches (1.8) is higher than the price elasticity of demand for apples (1.6), consumers are more sensitive to a change in the price of peaches than they are to a change in the price of apples.

If the Price Elasticity of Demand for Peaches Is 1