What does an (own) price elasticity of demand of 1.5 mean? - ProProfs Discuss
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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

This question is part of Microeconomics Exam #1
Asked by Wlkg, Last updated: Mar 28, 2020

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3 Answers

John Adney

John Adney

Answered Mar 29, 2017

Are we supposed to ignore the sign of the elasticity of demand when answering the question?
 

John Adney

John Adney

Answered Feb 26, 2017

Demand is inelastic. The quantity demanded changes 1.5 units for each 1% change in price.
 

John Smith

John Smith

Answered Nov 29, 2016

Demand is elastic
 1

herra

Herra

Replied on May 16, 2017

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.

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