Suppose that quantity demand rises by 10% as a result of a 15% decrease in price.The price elasticity of demand for this good is
A)inelastic and equal to 0.67.
B)elastic and equal to 0.67.
C)inelastic and equal to 1.50.
D)elastic and equal to 1.50.

Question

Quizplus · Accepted Answer

Price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is 10% / 15% = 0.67, which is less than 1, indicating inelastic demand.

Suppose That Quantity Demand Rises by 10% as a Result