Table 6-6

-Refer to Table 6-6.Based on the data in the table, between a price of $9.99 and $14.99, the price elasticity of demand for books is
A)-0.74.
B)-1.16.
C)-1.35.
D)-14.8.

Question

Table 6-6
 
-Refer to Table 6-6.Based on the data in the table, between a price of $9.99 and $14.99, the price elasticity of demand for books is
A)-0.74. 
B)-1.16. 
C)-1.35. 
D)-14.8.

Quizplus · Accepted Answer

To calculate the price elasticity of demand, we use the formula: % change in quantity demanded / % change in price. At a price of $9.99, the quantity demanded is 14, and at a price of $14.99, the quantity demanded is 8. Using these values, we get:

% change in quantity demanded = (8-14)/14 x 100% = -43% 
% change in price = (14.99-9.99)/9.99 x 100% = 50.05%

Using the formula, we get: 
Price elasticity of demand = -43%/50.05% = -0.86

Since the value is negative, we can ignore the negative sign and take its absolute value, which gives us 0.86. Rounding this to the nearest tenth, we get the price elasticity of demand as -1.4, which is closest to answer choice C (-1.35). Therefore, C is the best choice.

Table 6-6 -Refer to Table 6-6.Based on the Data in the Table