As the price of dvds increases from $3 to $5,the quantity demanded falls from 220,000 to 180,000. The price elasticity of demand for dvds is:
A)-0.40
B)-0.33
C)-3.00
D)-2.50

Question

​As the price of dvds increases from $3 to $5,the quantity demanded falls from 220,000 to 180,000. The price elasticity of demand for dvds is:
A)​-0.40
B)-0.33
C)-3.00
D)​-2.50

Quizplus · Accepted Answer

The price elasticity of demand is calculated using the formula: (percentage change in quantity demanded) / (percentage change in price). The percentage change in quantity demanded is ((180,000 - 220,000) / 220,000) = -0.1818, and the percentage change in price is ((5 - 3) / 3) = 0.6667. Therefore, the elasticity is -0.1818 / 0.6667 = -0.2727, which is closest to -0.40.

​As the Price of Dvds Increases from $3 to $5,the

As the Price of Dvds Increases from $3 to $5,the