Suppose at a price of $10 the quantity demanded is 100.When price falls to $8, the quantity demanded increases to 130.The price elasticity of demand between the prices of $10 and $8 is approximately:
A) -1.17.
B) -1.50.
C) -0.85.
D) -1.00.

Question

Quizplus · Accepted Answer

The price elasticity of demand is calculated using the formula: [(Q2 - Q1) / (Q2 + Q1) / 2] / [(P2 - P1) / (P2 + P1) / 2], where Q1 and Q2 are the initial and final quantities demanded, and P1 and P2 are the initial and final prices. Plugging in the given values: [(130 - 100) / (130 + 100) / 2] / [($8 - $10) / ($8 + $10) / 2] = 30/115 / -2/9 = -1.17.

Suppose at a Price of $10 the Quantity Demanded Is