A price elasticity of demand for a good or service of 1.8 tells us that:
A) the price changes by $1.80 when quantity changes by 1 unit.
B) quantity demanded falls by 1.8 percent when price rises by 1 percent.
C) the price rises by 1.8 percent when quantity demanded falls by 1 percent.
D) quantity demanded falls by 1.8 units when price changes by $1.

Question

Quizplus · Accepted Answer

Price elasticity of demand of 1.8 means that for a 1% increase in price, the quantity demanded decreases by 1.8%.

A Price Elasticity of Demand for a Good or Service