When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. The price-elasticity-of-demand coefficient for this product is
A)1.5.
B)0.15.
C)0.67.
D)6.7.

Question

Quizplus · Accepted Answer

The price-elasticity-of-demand coefficient is calculated as the percentage change in quantity demanded divided by the percentage change in price, which in this case is -15%/10% = -1.5 (ignoring the negative sign, as elasticity is often considered in absolute terms).

When the Price of a Product Is Increased 10 Percent