The absolute price elasticity of demand for lyft rides is 2.5
Reduction in price = 10%
The term "price elasticity" (more precisely, "price elasticity of demand") refers to the degree to which consumers are responsive to price fluctuations. The price elasticity of a good (or service) is often negative since the quantity bought typically declines as the price rises. However, the rate at which quantity purchased declines might range significantly between product categories, for various market sectors, due to the level of competition, and between brands.
Increase in quantity demanded = 25%
Demand-side pricing elasticity is determined by:
Price elasticity = Percent change in quantity demanded/Percentage Price variation
= 25/10
= 2.5
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