When the Blue Ocean Surfboard Company lowered the price of surfboards by 20 percent, it sold 10 percent more surfboards. What is the price elasticity coefficient for surfboards?
A) 0.5
B) 1
C) 2
D) 20

Question

Quizplus · Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is 10% / 20% = 0.5.

When the Blue Ocean Surfboard Company Lowered the Price of Surfboards