If the percentage change in the price of a good is 12% while the percentage change in the quantity demanded is 24%, then the price elasticity of demand for the good is _____.
A) perfectly elastic
B) inelastic
C) unit elastic
D) elastic

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 24% / 12% = 2. An elasticity greater than 1 indicates that the demand is elastic.

If the Percentage Change in the Price of a Good