Madeline spends exactly $10 on coffee each week.The absolute value of her price elasticity of demand for coffee is likely to be ________.
A) less than 1
B) more than 1
C) more than 1 but less than 3
D) equal to 1

Question

Quizplus · Accepted Answer

Since Madeline spends a constant amount on coffee regardless of price changes, her demand is unit elastic, meaning the percentage change in quantity demanded is equal to the percentage change in price, resulting in an elasticity of 1.

Madeline Spends Exactly $10 on Coffee Each Week