Question

A Chinese restaurant finds that when it prices the dinner buffet at ​$10​, the restaurant sells 150 per day. When the price is reduced to ​$9​, the restaurant sells 200 per day. Based on this​ information, use the​ average-values formula to find the price elasticity of demand for the dinner buffet. Provide the absolute value of the price elasticity of demand.A. 2.71B. 3.33C. 0.37D. 0.30

Answer 1

B. 3.33

Price Elasticity= %change in Qty/%change in price

%change in quantity= 50/150= 33%

%change in price =1/10= 10%

Price elasticity = 33/10=3.33

Step-by-step explanation: