Refer to the above data.Over which price range is the price elasticity of demand unitary?
A) $16-$14
B) $14-$12
C) $12-$10
D) $10-$8 Over the price range $12-$10,the change in quantity is (36 - 30)/(36 + 30)= 0.091 and the change in price is (12 - 10)/(12 + 10)= 0.091.Thus,price elasticity is 0.091/0.091 = 1.0.

Question

Refer to the above data.Over which price range is the price elasticity of demand unitary?
A) $16-$14 
B) $14-$12 
C) $12-$10 
D) $10-$8 Over the price range $12-$10,the change in quantity is (36 - 30)/(36 + 30)= 0.091 and the change in price is (12 - 10)/(12 + 10)= 0.091.Thus,price elasticity is 0.091/0.091 = 1.0.

Quizplus · Accepted Answer

The price elasticity of demand is unitary over the price range $12-$10 where the elasticity equals 1. At any price range with an elasticity less than 1, demand is inelastic, meaning that changes in price have a proportionally smaller effect on changes in quantity demanded. At any price range with an elasticity greater than 1, demand is elastic, meaning changes in price have a proportionally larger effect on changes in quantity demanded. Therefore, only option C is correct.

Refer to the Above Data