If the price of a cup of coffee increases by 50 percent,the quantity demanded decreases by 50 percent.The price elasticity of demand is:
A) elastic.
B) inelastic.
C) unit elastic.
D) zero.

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, both are 50%, so the elasticity is 1, indicating unit elasticity.

If the Price of a Cup of Coffee Increases by 50