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Following a decrease in price from $1.90 to $1.50, the weekly demand for a magazine increases from 100,000 to 120,000 copies. The price elasticity of demand for magazines in this range is:
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32 votes
Following a decrease in price from $1.90 to $1.50, the weekly demand for a magazine increases from 100,000 to 120,000 copies. The price elasticity of demand for magazines in this range is:

User Tim Johnsen
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1 Answer

18 votes
18 votes

Answer:

0,95

inelastic

Step-by-step explanation:

0.21

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

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

Price elasticity of demand = midpoint change in quantity demanded / midpoint change in price

If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.

Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one

Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.

Infinitely elastic demand is perfectly elastic demand. Demand falls to zero when price increases

Perfectly inelastic demand is demand where there is no change in the quantity demanded regardless of changes in price.

User Keira Nighly
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