Suppose the company that owns the vending machines on your campus has doubled the price of a can of soda. They then notice that they are selling approximately 15% fewer sodas. The price elasticity of demand for sodas from the campus vending machines, therefore, is:
A)inelastic
B)unit elastic
C)elastic
D)infinite

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, the quantity demanded decreased by 15% while the price increased by 100%, resulting in an elasticity of 0.15, which is less than 1, indicating inelastic demand.

Suppose the Company That Owns the Vending Machines on Your