Consider the following data: Price of A Quantity Demanded of A
$5 6
$4 10
The absolute value of the price elasticity of demand for product A is
A) 0.44.
B) 1.80.
C) 0.56.
D) 2.25.

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 percentage change in quantity demanded is (10-6)/6 = 0.67, and the percentage change in price is (4-5)/5 = -0.20. The elasticity is 0.67 / -0.20 = -3.35, and the absolute value is 2.25.

Consider the Following Data: Price of a Quantity Demanded of a