Whats the Whole Question?
The amount Louis just paid is considered to be the price.
What a price means or what it communicates to customers is called?
- A price's significance or the message it sends to clients are referred to as Interpretation.
- The extent to which a customer's pleasure with the product after the purchase and with the purchasing experience is enhanced by the price of a product is part of their Response.
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Answer:
the coefficient of elasticity is 0.5. Thus, demand is inelastic.
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
Price elasticity = 2/4 = 0.5
Because demand is less than1, big g has an inelastic demand.
