If the price of a good increases by 15% and the quantity demanded changes by 20%, then the price elasticity of demand is equal to:
A)0.75.
B)approximately 0.33
C)approximately 1.33.
D)1.

Question

Quizplus · Accepted Answer

Price elasticity of demand = (% Change in Quantity Demanded) / (% Change in Price)
Given, 
% Change in Price = 15%
% Change in Quantity Demanded = 20%
Price elasticity of demand = (20/15) = 1.33 (approximate)

If the Price of a Good Increases by 15% and the Quantity