Refer to the Table Above

question 119

Multiple Choice

Refer to the table above.Starting at a $5 price,at what price range does demand become inelastic?

• A) $1-2
• B) $2-3
• C) $3-4
• D) $4-5 At $2-3,the change is (30 - 40)/(30 + 40)= 0.143 and the percent in price is (3 - 2)/(3 + 2)= 0.20.Thus,elasticity is 0.143/0.20 = 0.714,which is inelastic.