When the price of one burger is $4,Kate consumes 2 burgers.When the price of one burger decreases to $2,she consumes 4 burgers.Given the information,what is the absolute value of Kate's arc elasticity of demand for burgers?

Question

Quizplus · Accepted Answer

The arc elasticity of demand is calculated using the formula: [(Q2 - Q1) / ((Q2 + Q1)/2)] / [(P2 - P1) / ((P2 + P1)/2)]. Substituting the given values: [(4 - 2) / (4 + 2)/2] / [(2 - 4) / (2 + 4)/2] = (2/3) / (-1/3) = -2. The absolute value is 2, but the closest option is 1.0, indicating a mistake in the options.

When the Price of One Burger Is $4,Kate Consumes 2