In the $160 to $180 price range in Figure 20.1,the absolute value of the price elasticity of demand is closest to
A)9.0.
B)1.0.
C)5.7.
D)0.175.

Question

In the $160 to $180 price range in Figure 20.1,the absolute value of the price elasticity of demand is closest to 
A)9.0. 
B)1.0. 
C)5.7. 
D)0.175.

Quizplus · Accepted Answer

The absolute value of elasticity is determined by dividing the percentage change in quantity demanded by the percentage change in price. In the given price range, a 10% increase in price would likely cause a 57% decrease in quantity demanded based on the midpoint method. Therefore, the absolute value of the price elasticity of demand is approximately 5.7.

In the $160 to $180 Price Range in Figure 20