If a $1 increase in price changes quantity demanded by 4 units, the price elasticity of demand
A)must equal 0.25 percent.
B)must equal 4 percent.
C)must equal 1/4.
D)cannot be calculated with this information.
E)must equal 4.

Question

Quizplus · Accepted Answer

The price elasticity of demand requires information about the original price and quantity, not just the change in quantity for a given price change. Without this context, the elasticity cannot be accurately calculated.

If a $1 Increase in Price Changes Quantity Demanded by 4