Question

If 50 units are sold at a price of $20 and 80 units are sold at a price of $15, what is the absolute value of the price elasticity of demand? Use the

Answer 1

Answer:

price elasticity of demand = |2.4|

Explanation:

price elasticity of demand = percentage change in quantity demanded / percentage change in price = [(80 - 50) / 50] / [($15 - $20) / $20 = (30/50) / (-$5 / $20) = 0.6 / -0.25 = -2.4

since we are required to give the absolute value, we must convert -2.4 to |2.4|