Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P x . Assume that P = $8, I = 200, and P x = $10.
-The price elasticity of demand is the ratio of the change in quantity demanded to the change in price.

Question

Quizplus · Accepted Answer

The definition of elasticity is correct, but the question asks whether the price elasticity of demand can be calculated with the given information, which is false. To calculate the price elasticity of demand, we require information on the percentage change in price and quantity demanded, which is not given here.

Scenario 5.1 The Demand for Noodles Is Given by the Following Equation