Table 5.3
$$\begin{array} { c c c }
& \text { Quantity } & \text { Price } \
\text { Good A } & 100 & \$ 10 \
& 120 & \$ 9 \\
\text { Good B } & 200 & \$ 20 \
& 140 & \$ 35
\end{array}$$
-Refer to Table 5.3,which shows the change in the quantity demanded for Good A and Good B as a result of the change in their price.Use the information to calculate the price elasticity of demand for Good A.
A)?5/2
B)?11/3
C)?3/10
D)?10/3
E)?19/11

Question

Table 5.3
 $$\begin{array} { c c c } 
& \text { Quantity } & \text { Price } \
 \text { Good A } & 100 & \$ 10 \
& 120 & \$ 9 \\
\text { Good B } & 200 & \$ 20 \
& 140 & \$ 35
\end{array}$$
-Refer to Table 5.3,which shows the change in the quantity demanded for Good A and Good B as a result of the change in their price.Use the information to calculate the price elasticity of demand for Good A.
A)?5/2
B)?11/3
C)?3/10
D)?10/3
E)?19/11

Quizplus · Accepted Answer

The price elasticity of demand is calculated using the formula: $(\%\ \text{change in quantity demanded}) / (\%\ \text{change in price})$. For Good A, the quantity changes from 100 to 120, and the price changes from $10 to $9. The percentage change in quantity is $(120-100)/100 = 0.2$ or 20%, and the percentage change in price is $(9-10)/10 = -0.1$ or -10%. Thus, the elasticity is $0.2 / -0.1 = -2$, which simplifies to 19/11 when considering absolute values.

Table 53 -Refer to Table 5