Table: Price Elasticity (Table: Price Elasticity) Look again at the table Price Elasticity.What is the price elasticity of demand between $1.25 and $1.00?
A)0.60
B)0.82
C)1.0
D)1.6

Question

Table: Price Elasticity   (Table: Price Elasticity) Look again at the table Price Elasticity.What is the price elasticity of demand between $1.25 and $1.00?
A)0.60 
B)0.82 
C)1.0 
D)1.6

Quizplus · Accepted Answer

The formula for price elasticity of demand is [(Q2-Q1)/((Q2+Q1)/2)]/[(P2-P1)/((P2+P1)/2)]. Using the data for $1.25 and $1.00, we get:

- Q1 = 100
- Q2 = 120
- P1 = $1.25
- P2 = $1.00

[(120-100)/((120+100)/2)]/[(1.00-1.25)/((1.00+1.25)/2)] = 0.82. Therefore, the answer is B.

Table: Price Elasticity (Table: Price Elasticity) Look Again