If the price of apples decreases by 2 percent and causes apple consumption to increase by 4 percent, the price elasticity of demand is ____, indicating the demand is ____.
A) 2; elastic
B) 2; inelastic
C) 0.5; elastic
D) 0.5; inelastic

Question

Quizplus · Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is 4% / 2% = 2, indicating elastic demand.

If the Price of Apples Decreases by 2 Percent and Causes