Use the following to answer question(s):
-(Exhibit: Demand and Price Elasticity 1) What is the price elasticity of demand between $1.00 and $0.75?
A) -0.54
B) -0.66
C) -0.75
D) -1.0

Question

Use the following to answer question(s): 
-(Exhibit: Demand and Price Elasticity 1) What is the price elasticity of demand between $1.00 and $0.75?
A) -0.54 
B) -0.66 
C) -0.75 
D) -1.0

Quizplus · Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Between $1.00 and $0.75, the price decreases by 25% (from $1.00 to $0.75) and the quantity demanded increases by 50% (from 4 to 6). Therefore, the price elasticity of demand is -0.54 (50% / 25%).

Use the Following to Answer Question(s)