Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P x . Assume that P = $8, I = 200, and P x = $10.
-If the price elasticity of demand is between -1 and -, then demand is inelastic.

Question

Quizplus · Accepted Answer

The statement is incomplete. It should be "If the price elasticity of demand is between -1 and 0, then demand is inelastic". However, we are not given the actual value of price elasticity of demand, so we cannot conclude whether demand is inelastic or not.

Scenario 5.1 The Demand for Noodles Is Given by the Following Equation