If a product's price rises by 6% and its quantity demanded falls by 8%, then its elasticity is equal to
A) 0.75.
B) 1.33.
C) 2.00.
D) 6.00.

Question

Quizplus · Accepted Answer

The elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is (-8% / 6%) = -1.33. The negative sign indicates the inverse relationship between price and quantity demanded, but elasticity is often reported in absolute value, making the correct answer 1.33.

If a Product's Price Rises by 6% and Its Quantity