From the above, calculate the price elasticity of demand<...
From the above, calculate the price elasticity of demand
A.
5.0
B.
2.0
C.
1.0
D.
0.5
Correct answer is A
price elasticity of demand is calculated as the;
percentage change in quantity demanded
percentage change in price
Change in quantity = 500 - 400 = 100
% change = 100/100 = 1%
Change in price = 70 - 50 = 20
% change = 20/100 = 0.2%
price elasticity = 1/0.2 = 5
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