What does an (own) price elasticity of demand of -1.5 mean?
A. Demand is elastic B. Quantity demanded changes 1.5 units for each 1% change in price C. Quantity demanded changes .5% for each 1% change in price D. Quantity demanded changes 5% for each 1% change in price
In this the ed<1 i.e -1.5 so the proportiontate change in demand is less than the proportionate change in its prices and this is the case of inelastic demand so howcome the ans is A , when it should be C.