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Price Elasticity

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Price rises from $10 to $15, and the quantity demanded falls from 100 units to 60 units. What is the coefficient of the price elasticity of demand between the two prices?

A) 1.25
B) 0.80
C) 0.60
D) 1.00

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Solution Summary

This solution calculates the price elasticity of demand for a product.

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Answer: A.

The change in price is $5.00.
The change in demand is 40.

The average price is ($10.00 + $15.00)/2 = ...

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