Question 9
ElasticityIf the quantity demanded of a commodity increases from 20 units to 30 units when there is an increase in price from $4.00 to $5.00, the elasticity of demand is
- A.0.50
- B.0.65
- C.2.00
- D.2.50
Show the answer and explanation
Answer: C (2.00)
Explanation
Quantity rises 50% for a 25% price rise: 50 ÷ 25 = 2.00.