Suppose You Are Given the Following Data on Demand for a Product.The

Multiple Choice

Suppose you are given the following data on demand for a product.The price elasticity of demand when price decreases from $9 to $7 is:

A) 0.63.
B) 1.16.
C) 1.60.
D) 2.27.
The change in quantity is (60 - 40) /(60 + 40) = 0.20,and the change in price is (7 - 9) /(7 + 9) = 0.125.Thus,elasticity is 1.60 and the product is elastic.