If the price of chocolate-covered peanuts decreases from $1.15 to $0.90 and the quantity demanded does not change, then the price elasticity of demand (using the midpoint method) is:
A)0.5.
B)0.
C)1.
D)0.9.

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. Since the quantity demanded does not change, the percentage change in quantity demanded is 0, making the elasticity 0.

If the Price of Chocolate-Covered Peanuts Decreases from $1