If, when price changes by 35 percent, the quantity demanded changes by 7 percent, then the absolute value of the price elasticity of demand is 5.

Question

Quizplus · Accepted Answer

The absolute value of the price elasticity of demand in this case should be calculated as (percentage change in quantity demanded) / (percentage change in price).

Substituting the given values, we get:

Price elasticity of demand = 7% / 35%

Price elasticity of demand = 0.2

Therefore, the absolute value of the price elasticity of demand is 0.2, which is not equal to 5. Hence, the statement is false.

If, When Price Changes by 35 Percent, the Quantity Demanded