Suppose You Are Given the Following Data on Demand for a Product.The

question 23

Multiple Choice

Suppose you are given the following data on demand for a product.The price elasticity of demand when price decreases from $9 to $7 is:

• A) 0.63.
• B) 1.16.
• C) 1.60.
• D) 2.27. The change in quantity is (60 - 40)/(60 + 40)= 0.20,and the change in price is (7 - 9)/(7 + 9)= 0.125.Thus,elasticity is 1.60 and the product is elastic.