Use the table below to answer the following question.
Table 4.1.2

-Refer to Table 4.1.2. The table shows two points on the demand curve for volleyballs. What is the price elasticity of demand between these two points?
A)2.5
B)2.0
C)0.5
D)0.4
E)5.0

Question

Use the table below to answer the following question.
Table 4.1.2
 
-Refer to Table 4.1.2. The table shows two points on the demand curve for volleyballs. What is the price elasticity of demand between these two points?
A)2.5 
B)2.0 
C)0.5 
D)0.4 
E)5.0

Quizplus · Accepted Answer

The price elasticity of demand between two points is calculated using the formula:
(price change % / quantity change %)
Using the two points in the table, we can calculate the price change and quantity change:
Price change = $14 - $12 = $2 = 16.7%
Quantity change = 300 - 400 = -100 = -25%
So, the price elasticity of demand between these two points is:
16.7% / -25% = -0.67 = -2 (absolute value)
Since price elasticity of demand is always a positive number, we take the absolute value. Therefore, the answer is 2.0.

Use the Table Below to Answer the Following Question