Suppose the Price of a Calculator Is $18 and the Quantity

question 81

Multiple Choice

Suppose the price of a calculator is $18 and the quantity demanded is 90. When the price increases to $22, the quantity demanded drops to 70. Using the mid-point method, what is the price elasticity of demand for calculators?

• A) −1.25
• B) −25 percent
• C) −20 percent
• D) −25

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Definitions:

Extreme-Value Retailer

A retail format focusing on offering extremely low prices on a wide range of products, often in a no-frills shopping environment.

Single-Price Retailer

A retail store that sells every item in its inventory at the same fixed price, offering simplicity and consistency to customers.

Specialty Outlet

A retail store that focuses on selling a specific type of merchandise, offering specialized knowledge and a broader selection than general stores.

Hypermarket

A large retail facility that combines a supermarket and a department store, offering a wide variety of food and general merchandise at low prices.