If a $1 increase in price changes quantity demanded by 4 units,the price elasticity of demand
A)must equal .25 percent.
B)must equal 4 percent.
C)must equal 1/4.
D)cannot be calculated with this information.
E)must equal 4.

Question

Quizplus · Accepted Answer

Price elasticity of demand requires both the percentage change in quantity demanded and the percentage change in price, not just the absolute changes.

If a $1 Increase in Price Changes Quantity Demanded by 4