If a 3 percent change in price results in a 1.5 percent change in quantity demanded, then the price elasticity of demand is ____ and demand is ____.
A)1/2; inelastic
B)1/2; elastic
C)2; inelastic
D)1; unit elastic
E)2; elastic

Question

Quizplus · Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price, which is 1.5/3 = 0.5 or 1/2. Since the value is less than 1, demand is considered inelastic.

If a 3 Percent Change in Price Results in a 1.5