Studying for finals, had a quick question on own price elasticity.
If a price increase from $5 to $7 causes quantity demanded to fall from 150 to 100 units, the own-price elasticity of demand over that price range is:
a. -1.75
b.0.02
c. -1.2
d. -.57
I have only been able to get the answer -1.2 which is C. but to do that i have been switching dividing the change in price instead of the change in quantity. Is that what I should be doing? thanks any help is appreciated
If a price increase from $5 to $7 causes quantity demanded to fall from 150 to 100 units, the own-price elasticity of demand over that price range is:
a. -1.75
b.0.02
c. -1.2
d. -.57
I have only been able to get the answer -1.2 which is C. but to do that i have been switching dividing the change in price instead of the change in quantity. Is that what I should be doing? thanks any help is appreciated