If a 1 percent change in price results in a 4 percent change in quantity demanded, then
A)the price elasticity of demand is 4.
B)the slope of the demand curve is 1/4.
C)the slope of the demand curve is 4.
D)the price elasticity of demand is 1/4.
E)there is not enough information to calculate slope or elasticity.

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 in this case is 4%/1% = 4.

If a 1 Percent Change in Price Results in a 4