Question

At a price of $100, Beachside Canoe Rentals rented 11 canoes. When it increased its rental price to $125, 9 canoes were rented. Calculate the absolute value of the price elasticity of demand for canoe rentals, using the midpoint formula. Group of answer choices

Answer 1

The absolute value of the price elasticity of demand for canoe rentals is 0.9

Step-by-step explanation:

In order to calculate absolute value of the price elasticity of demand for canoe rentals we would have to make the following calculation:

price elasticity of demand for canoe rentals = ((9-11)/(9+11)/2)/((125-100)/(125+100)/2) = -.9

price elasticity of demand for canoe rentals=-0.9

absolute value of -0.9 is 0.9

Therefore, the absolute value of the price elasticity of demand for canoe rentals is 0.9