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Range of elasticity

This topic has 2 replies, 3 voices, and was last updated 8 years ago by speranca.

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November 16, 2015 at 4:59 pm #282936
darchana
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A shop sells 100 shirts each month at a price of $20. When the price is increased to $24 the total sales revenue rises by 14% . Within which range does the price elasticity of demand lie?
A. Under 0.15
B. Greater than 0.15 and less than 0.5
C. Greater than 0.5 and less than 1.0
D. Greater than 1.0
November 16, 2015 at 7:34 pm #283102
Ken Garrett
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Before I simply give the answer to this, what are your thoughts?
February 18, 2016 at 12:19 pm #300967
speranca
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answer is C
PED= % in quantity / % in price = 14%/20% = 0.7
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