A 2 percent rise in the price of a good leads to a 4 percent decrease in quantity demanded. The absolute price elasticity of demand is
A) 2.
B) 0.5.
C) 20.
D) 5.

Name: A 2 percent rise in the price of a good leads to a 4 percent decrease in quantity demanded. The absolute price elasticity of demand is A) 2. B) 0.5. C) 20. D) 5.
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Question

Quizplus · Accepted Answer

The absolute price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is 4% / 2% = 2.

A 2 Percent Rise in the Price of a Good