Suppose the University of Oklahoma increases the price of student football tickets for the 2012 season by 30 percent.If the price elasticity of demand for student tickets is 1.22,the price increase leads to
A) a 36.6 percent decrease in the quantity demanded.
B) a 30 percent decrease in the quantity demanded.
C) a 1.22 percent decrease in the quantity demanded.
D) 28.78 percent decrease in the quantity demanded.
E) no change in the quantity demanded.

Question

Quizplus · Accepted Answer

The price elasticity of demand formula is % Change in Quantity Demanded / % Change in Price. Given a 30% increase in price and an elasticity of 1.22, the % change in quantity demanded is 1.22 * 30% = 36.6%.

Suppose the University of Oklahoma Increases the Price of Student