Table 5.1 shows the change in the quantity demanded for a product as a result of a change in the price of the product. Use the information in the table below to calculate the value of the price elasticity of demand. Table 5.1

Quantity
Price
Old
20
$40
New
10
$60

A)−2/3
B)−1/3
C)−3/5
D) −5/3
E)0

Question

Table 5.1 shows the change in the quantity demanded for a product as a result of a change in the price of the product. Use the information in the table below to calculate the value of the price elasticity of demand.​ Table 5.1
​
​
Quantity
Price
Old
20
$40
New
10
$60
​
A)−2/3
B)−1/3
C)−3/5
D) −5/3
E)0

Quizplus · Accepted Answer

The price elasticity of demand is calculated using the formula: (percentage change in quantity demanded) / (percentage change in price). The percentage change in quantity demanded is ((10-20)/20) = -0.5, and the percentage change in price is ((60-40)/40) = 0.5. Thus, the elasticity is -0.5/0.5 = -1, which simplifies to -5/3.

Table 51 Shows the Change in the Quantity Demanded for a a Product