If the price of a good increases by 15%, and quantity demanded changes by 5%, then the price elasticity of demand is equal to:
A)0.75.
B)approximately 0.33.
C)approximately 1.33.
D)1.

Question

Quizplus · Accepted Answer

Price elasticity of demand = % change in quantity demanded / % change in price

Given: 
% change in price (P) = 15%
% change in quantity demanded (Q) = 5%

Plugging in the values, we get:

Price elasticity of demand = 5%/15% = 0.33

Therefore, the answer is B, approximately 0.33.

If the Price of a Good Increases by 15%, and Quantity