Shaina and Mariah have a business that provides personal fitness training services. They know that after raising their prices from $100 to $150 per hour, the quantity of hours they spent delivering training services fell from 45 to 40 hours per week. The demand for their services is:
A)elastic, with a price elasticity coefficient greater than one.
B)elastic, with a price elasticity coefficient less than one.
C)inelastic, with a price elasticity coefficient greater than one.
D)inelastic, with a price elasticity coefficient less than one.

Question

Shaina and Mariah have a business that provides personal fitness training services. They know that after raising their prices from $100 to $150 per hour, the quantity of hours they spent delivering training services fell from 45 to 40 hours per week. The demand for their services is:
A)​elastic, with a price elasticity coefficient greater than one.
B)​elastic, with a price elasticity coefficient less than one.
C)​inelastic, with a price elasticity coefficient greater than one.
D)​inelastic, with a price elasticity coefficient less than one.

Quizplus · Accepted Answer

The decrease in quantity demanded of hours from 45 to 40 is only a 12.5% decrease. This suggests that the demand is relatively inelastic, meaning that the price elasticity coefficient is less than one.

Shaina and Mariah Have a Business That Provides Personal Fitness