For a certain good,when the good's price falls from $12 to $10,its quantity demanded rises from 10 to 12 units.The price elasticity of demand here is
A) 2.55.
B) 0.66.
C) 0.39.
D) 0.20.
E) 1.00

Question

Quizplus · Accepted Answer

The price elasticity of demand is calculated using the formula: (percentage change in quantity demanded) / (percentage change in price). Here, the percentage change in quantity demanded is (12-10)/10 = 0.2 or 20%, and the percentage change in price is (10-12)/12 = -0.1667 or -16.67%. The elasticity is 0.2 / -0.1667 = -1.20, but since elasticity is typically expressed as an absolute value, it is 1.00.

For a Certain Good,when the Good's Price Falls from $12