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skelet666 [1.2K]
3 years ago
10

The quantity of a good demanded rises from 90 units to 110 units when the price falls from $1.20 to $.80 per unit. The price ela

sticity of demand for this product approximates​
Business
1 answer:
Stels [109]3 years ago
4 0

Answer:

PED = -0.67 or |0.67| in absolute terms, price inelastic

Explanation:

price elasticity of demand = percentage change in quantity demanded / percentage change in price

percentage change in quantity demanded = (110 - 90) / 90 = 22.22%

percentage change in price = ($0.80 - $1.20) / $1.20 = -33.33%

PED = 22.22% / -33.33% = -0.67 or |0.67| in absolute terms, price inelastic

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