When the price of milk increases 6%,quantity demanded decreases 4%.The elasticity for milk is:
A)perfectly elastic.
B)elastic.
C)inelastic.
D)unitary elastic.

Question

Quizplus · Accepted Answer

The elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. In this case, the percentage change in price is 6% and the percentage change in quantity demanded is -4%. Therefore, the elasticity of demand is -4% / 6% = -0.67. This value is less than 1, which means that the demand for milk is inelastic.

When the Price of Milk Increases 6%,quantity Demanded Decreases 4