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It is Valentine's Day and Jason is desperately looking all over town for a dozen roses to give to Judy. Most likely, Jason's price elasticity of demand is:

a.infinitely large.
b.negative.
c.equal to one.
d.greater than one.
e.less than one.

User Rafsanjani
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1 Answer

4 votes

Answer:

e.less than one

Step-by-step explanation:

Price elasticity of demand refers to percentage change in quantity demanded with respect to percent change in price. It is given by the following formula:

Price elasticity of demand = ΔQ/ΔP × P/Q

where ΔQ = change in quantity

ΔP= change in price

P= Base year price

Q= Base year quantity

In the current case, Jason will not be much bothered by a rise in price of roses owing to the occasion wherein roses are a necessity to him. Hence his demand would be inelastic.

An inelastic demand would lie between 0 and 1. Thus, the correct option is e.less than one

User Shadrack Orina
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