A 10 percent increase in the price of smartphones leads to a 10 percent decrease in the quantity demanded of smartphones. The absolute price elasticity of demand is
A) 3.
B) 0.3.
C) 1.0.
D) 0.01.

Question

Quizplus · Accepted Answer

The absolute price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, both are 10%, so the elasticity is 1.0.

A 10 Percent Increase in the Price of Smartphones Leads