4. Wilford has developed a leg pillow for long airline flights that reduces the risk of blood clots. He isn't sure how to develo
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Answer:
Explanation:
In response to the price rise from $50 to $60, the quantity demanded of product X drops from 400 to 300 units. We know that price elasticity of demand is a measure of the responsiveness of changes in demand as a result of a price change. Thus,
% change in price =
= = 0.1818
% Change in Quantity demanded
=
=
= -0.2857
Thus,
Price elasticity of demand =
=
= -1.5715
Therefore, the price elasticity of demand = -1.5715