The price elasticity of demand for eggs is .27 and the price elasticity of demand for soft drinks is .70.Therefore,the demand for eggs
A) is more elastic.
B) is less elastic.
C) cannot be compared to the demand for soft drinks because both are negative.
D) cannot be compared to the demand for soft drinks because eggs cannot be substituted for soft drinks.

Question

Quizplus · Accepted Answer

A price elasticity of demand of .27 for eggs means that for a 1% increase in price, quantity demanded will decrease by only .27%. A price elasticity of demand of .70 for soft drinks means that for a 1% increase in price, quantity demanded will decrease by .70%. Therefore, the demand for soft drinks is more elastic than the demand for eggs.

The Price Elasticity of Demand for Eggs Is