Figure 7-7
-In the price range between $3 and $4, the price elasticity of the demand curve depicted in Figure 7-7 is
A) highly elastic.
B) approximately equal to −0.33.
C) approximately equal to −3.
D) of unitary elasticity.

Question

Figure 7-7 
-In the price range between $3 and $4, the price elasticity of the demand curve depicted in Figure 7-7 is
A) highly elastic. 
B) approximately equal to −0.33. 
C) approximately equal to −3. 
D) of unitary elasticity.

Quizplus · Accepted Answer

Price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. An elasticity of -3 indicates that the demand is highly elastic, meaning a 1% increase in price leads to a 3% decrease in quantity demanded.

Figure 7-7 -In the Price Range Between $3 and $4, the Price