Redbox Rents DVDs for $1 Per Day Via Self-Service Kiosks

Multiple Choice

Redbox rents DVDs for $1 per day via self-service kiosks located across the United States. In 2007, each kiosk averaged about 50 rentals per day. Suppose Redbox increases their daily price to $1.50. What is the price elasticity of demand if rentals decrease by 20 per day?

A) 1.25
B) 1.33
C) 1
D) 0.8