If the price of snorkeling tours decreases by 15% and this leads to an increase in the quantity demanded of 30%, the price elasticity of demand is _____ and the demand for snorkeling tours is _____.
A) 0.5; elastic
B) 0.5; inelastic
C) 2; elastic
D) 2; inelastic

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 30% / 15% = 2. A value greater than 1 indicates that the demand is elastic.

If the Price of Snorkeling Tours Decreases by 15% and This