If quantity demanded for sneakers falls by 10 percent when price increases 25 percent,we know that the absolute value of the own price elasticity of sneakers is:
A) 2.5.
B) 0.4.
C) 2.0.
D) 0.27.

Question

Quizplus · Accepted Answer

The own price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Therefore, the absolute value of the own price elasticity of sneakers is |(-10%)/(25%)| = 0.4.

If Quantity Demanded for Sneakers Falls by 10 Percent When