Question

2.Suppose the price elasticity of demand is equal to - 0.5. Which of the following statements is the correct interpretation of this number?​

Answer 1

Answer:

Elastic demand is when the percentage change in the quantity demanded exceeds the percentage change in price. That makes the ratio more than one. For example, say the quantity demanded rose 10% when the price fell 5%. The ratio is 0.10/0.05 = 2.