When the price elasticity of demand for a good is 1.5, this means that a 1 percent change in price creates a ______ in quantity demanded.
A) 0.1 percent increase
B) 1.5 percent decrease
C) 1.5 percent increase
D) 15 percent increase
E) 15 percent decrease

Question

Quizplus · Accepted Answer

When the price elasticity of demand is 1.5, it means that a 1 percent change in price leads to a 1.5 percent change in the quantity demanded, in the opposite direction (if price increases, quantity demanded decreases, and vice versa).

When the Price Elasticity of Demand for a Good Is