Question

If you compute the price elasticity of demand using a quantity of tickets from 1 to 8 and using a quantity of tickets from 1,000 to 8,000, the value of the price elasticity of demand isA. smaller when values from 1,000 to 8,000 are used because these values are larger than units 1 to 8.B. the same because the percentage change in quantity will remain the same.C. equal to one in both cases.D. larger when values from 1,000 to 8,000 are used because these values are larger than units 1 to 8.

Answer 1

The correct answer is option B.

Step-by-step explanation:

The value of price elasticity of demand will be the same if the quantity of tickets changes from 1 to 8 and 1,000 to 8,000. The price elasticity is calculated on the basis of proportionate change in quantity demanded.

The proportionate change in quantity demanded is the same in both cases. So, the price elasticity of demand will also be the same.