If the price of orange juice rises 10%,and as a result the quantity demanded falls by 8%,the price elasticity of demand for orange juice is
A) -1.25.
B) -80.0.
C) -0.80.
D) -10.0.

Question

Quizplus · Accepted Answer

We can use the formula for price elasticity of demand:
% change in quantity demanded/% change in price = -8%/10% = -0.8
Since the answer is negative, we know that the demand for orange juice is elastic (i.e., price sensitive). The closest answer choice that matches the calculated price elasticity of demand is C.

If the Price of Orange Juice Rises 10%,and as a Result