The table below shows the demand schedule for museum admissions in a small city.
TABLE 4-1
-Refer to Table 4-1.Between the prices of $2 and $4 the price elasticity of demand is
A)1/3.
B)2/3.
C)1.
D)2.
E)3.

Question

The table below shows the demand schedule for museum admissions in a small city.
  TABLE 4-1
-Refer to Table 4-1.Between the prices of $2 and $4 the price elasticity of demand is
A)1/3. 
B)2/3. 
C)1. 
D)2. 
E)3.

Quizplus · Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Between the prices of $2 and $4, the quantity demanded changes from 10 to 6, a decrease of 4 units. The price changes from $2 to $4, an increase of $2. Therefore, the price elasticity of demand is (4/10) / (2/2) = 1/3.

The Table Below Shows the Demand Schedule for Museum Admissions