Table: Price Elasticity
(Table: Price Elasticity) Look again at the table Price Elasticity.What is the price elasticity of demand between $1.75 and $1.50?
A)0.42
B)1.5
C)1.86
D)0.08

Question

Quizplus · Accepted Answer

The formula for price elasticity of demand is (% change in quantity demanded / % change in price). Between $1.75 and $1.50, quantity demanded changes from 3 units to 5 units, which is an increase of 66.67%. The price changes from $1.75 to $1.50, which is a decrease of 14.29%. Therefore, the price elasticity of demand is 66.67% / (-14.29%) = -1.86, which is equivalent to 1.86 because we typically express price elasticity as a positive number.

Table: Price Elasticity (Table: Price Elasticity) Look Again at the Table Price Elasticity.What