If the price of hairbrushes decreases by 20 percent,the quantity demanded increases by 2 percent.The price elasticity of demand is:
A) 0.1, and is elastic.
B) 10 and is elastic.
C) 0.1 and is inelastic.
D) 10 and is inelastic.

Question

Quizplus · Accepted Answer

Price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is 2% / -20% = -0.1, which is inelastic.

If the Price of Hairbrushes Decreases by 20 Percent,the Quantity