If the price elasticity of demand for football tickets is estimated to be 4.5, then a 10 percent increase in football ticket prices would be expected to cause a
A) 4.5 percent decrease in quantity demanded.
B) 4.5 percent increase in quantity demanded.
C) 45 percent decrease in quantity demanded.
D) 45 percent increase in quantity demanded.
E) 450 percent increase in quantity demanded

Question

Quizplus · Accepted Answer

The price elasticity of demand formula is % change in quantity demanded / % change in price. If the price elasticity of demand for football tickets is 4.5, a 10 percent increase in price would result in a 4.5 times larger percentage decrease in quantity demanded, or 45 percent. Therefore, the correct answer is C.

If the Price Elasticity of Demand for Football Tickets Is