Uber increases the price of a ride in New York City by 10%, and the quantity of rides demanded falls by 30%. The absolute value of the price elasticity of demand for Uber rides is _____, and the price elasticity of demand is _____.
A)0.33; elastic
B)0.33; inelastic
C)3; elastic
D)3; 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% / 10% = 3, which is greater than 1, indicating that the demand is elastic.

Uber Increases the Price of a Ride in New York