Question

As the price of video games is raised from $20to $25, their quantity demanded fell from 1.5 million copies to 1 million copies. the price elasticity of demand for video games is:
a. ​-0.55
b. ​-1.8
c. ​-1.33
d. ​-2.08

Answer 1

In the following ways, demand for video games is elastic to price:

-1.33 for option (c).

Where Q and P are quantity and prices, respectively, elasticity is calculated as (Q2 - Q1)/Q1 divided by (P2 - P1)/P1. It will thus be (1-1.5)/1.5 divided by (25-20)/20. It will thus be (-0.5*20) / (1.5*5) = -1.33.

In economics, the quantity of an item that customers are willing and able to purchase at various prices during a certain time period is known as the demand. The demand curve This phrase describes the relationship between price and quantity and demand. How much of a certain product is in demand depends on a variety of factors, including perceived necessity, price, perceived quality, convenience, alternatives provided, customer preferences, disposable income, and a number of other elements.

The link between a good's quantity and its price

Learn more about demand here:

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