Refer to the table above.Starting at a $5 price,at what price range does demand become inelastic?
A) $1-2
B) $2-3
C) $3-4
D) $4-5 At $2-3,the change is (30 - 40)/(30 + 40)= 0.143 and the percent in price is (3 - 2)/(3 + 2)= 0.20.Thus,elasticity is 0.143/0.20 = 0.714,which is inelastic.

Question

Refer to the table above.Starting at a $5 price,at what price range does demand become inelastic?
A) $1-2 
B) $2-3 
C) $3-4 
D) $4-5 At $2-3,the change is (30 - 40)/(30 + 40)= 0.143 and the percent in price is (3 - 2)/(3 + 2)= 0.20.Thus,elasticity is 0.143/0.20 = 0.714,which is inelastic.

Quizplus · Accepted Answer

Starting at a price of $2-3, the elasticity of demand is 0.714, which is less than 1, indicating inelastic demand. Therefore, the price range of $2-3 is where demand becomes inelastic.

Refer to the Table Above