Suppose that Mimi plays golf 5 times per month when the price is $40 and 4 times per month when the price is $50. What is the price elasticity of Mimi's demand curve?
A) 0.1
B) 0.8
C) 1.0
D) 10.0

Question

Quizplus · Accepted Answer

The price elasticity of demand is calculated using the formula: (percentage change in quantity demanded) / (percentage change in price). The percentage change in quantity is ((4-5)/5)*100 = -20%, and the percentage change in price is ((50-40)/40)*100 = 25%. Thus, elasticity = |-20%/25%| = 0.8.

Suppose That Mimi Plays Golf 5 Times Per Month When