Assume that when price is $20,quantity demanded is 9 units,and when price is $19,quantity demanded is 10 units.Based on this information,we can conclude that over the price range from $19 to $20,demand is price:
A)elastic.
B)unit elastic.
C)inelastic.
D)cannot be determined.

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, the percentage change in quantity demanded is (10-9)/9 = 11.11%, and the percentage change in price is (19-20)/20 = -5%. The elasticity is 11.11% / -5% = -2.22, which is greater than 1 in absolute value, indicating elastic demand.

Assume That When Price Is $20,quantity Demanded Is 9 Units,and