Suppose the price elasticity of demand for apples is 2.3 and the price elasticity of demand for housing is .65.In comparing price elasticities of demand,it is proper to say that the demand for apples is
A)inelastic; for housing it is elastic.
B)more elastic than the demand for housing.
C)more inelastic than the demand for housing.
D)more than three times as inelastic as the demand for housing.
E)less elastic than the demand for housing.

Question

Quizplus · Accepted Answer

The price elasticity of demand for apples is 2.3, which is greater than 1, indicating that the demand for apples is elastic. On the other hand, the price elasticity of demand for housing is 0.65, which is less than 1, indicating that the demand for housing is inelastic. Therefore, the demand for apples is more elastic than the demand for housing, making choice (B) the best option.

Suppose the Price Elasticity of Demand for Apples Is 2