On October 1, 2009, the Nintendo Wii's Japanese price dropped from ¥25,000 to ¥20,000. In the three months after the price drop, Japanese sales of the Wii were approximately 1,040,000. Twelve months earlier, over the same interval at the high price, sales totaled 890,000. Using the midpoint method, what is the absolute value of the price elasticity of demand of a Wii console? Is it an elastic or inelastic good?
A) 1.43; inelastic
B) 0.7; inelastic
C) 1.43; elastic
D) 0.7; elastic

Question

Quizplus · Accepted Answer

The Answer of On October 1, 2009, the Nintendo Wii's Japanese price dropped from ¥25,000 to ¥20,000. In the three months after the price drop, Japanese sales of the Wii were approximately 1,040,000. Twelve months earlier, over the same interval at the high price, sales totaled 890,000. Using the midpoint method, what is the absolute value of the price elasticity of demand of a Wii console? Is it an elastic or inelastic good?
A) 1.43; inelastic
B) 0.7; inelastic
C) 1.43; elastic
D) 0.7; elastic

On October 1, 2009, the Nintendo Wii's Japanese Price Dropped