What is the price elasticity of demand for eggs if a 10 percent increase in the price of eggs results in a 5 percent decrease in the quantity of eggs demanded?
A) 0.1
B) 0.5
C) 1.0
D) 1.5

Question

Quizplus · Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is -5% / 10% = -0.5. The negative sign indicates the inverse relationship between price and quantity demanded, but the magnitude (0.5) is what's typically reported, making the correct answer 0.5.

What Is the Price Elasticity of Demand for Eggs If