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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
Before I simply give the answer to this, what are your thoughts?
answer is C
PED= % in quantity / % in price = 14%/20% = 0.7