How Is the Price Elasticity of Demand Calculated

question 66

Multiple Choice

How is the price elasticity of demand calculated?

• A) averaging previous demand levels with new demand levels
• B) dividing percentage change in quantity demanded by percentage change in price
• C) dividing the new quantity demanded by the percentage change in price times 100
• D) multiplying the percentage change in quantity demanded by the percentage change in price
• E) dividing the percentage change in price by the percentage change in quantity demanded

---

Definitions:

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.

Federal Reserve Board

The governing body of the Federal Reserve System, the central banking system of the United States, responsible for setting monetary policy, regulating banks, and ensuring the stability of the financial system.

U.S. Government

The federal government of the United States, a republic consisting of three branches: legislative, executive, and judicial, established by the Constitution to govern the country.

Unemployment

The condition of being jobless and actively looking for work, typically measured as a percentage of the labor force.