Suppose That at a Price of €30 Per Month, There

Multiple Choice

Suppose that at a price of €30 per month, there are 30,000 subscribers to cable television in Small Town. If Small Town Cablevision raises its price to €40 per month, the number of subscribers will fall to 20,000. Using the midpoint method for calculating the elasticity, what is the price elasticity of demand for cable TV in Small Town?

A) 1.4
B) 0.66
C) 0.75
D) 2.0
E) 1.0