If a 4 percent change in the price of a good leads to a 3 percent change in quantity demanded,the price elasticity of demand equals
A) 1.33.
B) 0.75.
C) 4.00.
D) 3.44.
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

Price elasticity of demand is calculated by the percentage change in quantity demanded divided by the percentage change in price. Therefore, elasticity = 3%/4% = 0.75.

If a 4 Percent Change in the Price of a Good