If the quantity of Harley-Davidson motorcycles demanded decreases by 10% when the price increases by 20%,the price elasticity of demand for Harley-Davidson motorcycles is:
A)-0.50
B)-2.0
C)-10.0
D)-20.0

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. In this case, the quantity demanded decreases by 10% when the price increases by 20%, so the price elasticity of demand is -10% / 20% = -0.5.

If the Quantity of Harley-Davidson Motorcycles Demanded Decreases by 10