Question

Qiqi, a highly motivated entrepreneur plans on applying for a business loan from Bank of America. She finds out that the percent change in price of business loans increased to 5% last month. This resulted in a 50% percent change in quantity demanded. What is the business loan’s price elasticity?

Answer 1

Answer:

that is 10

Explanation:

As we know that the formula for calculating price elasticity is

Price elasticity = % change in quantity demanded/% change in price

in this question

% change in quantity demanded is = 50%

% change in price = 5 %

so by using above mention formula we we calculate the price elasticity

Price elasticity = 50% /5 % = 10

so the answer of price elasticity is 10

it does not have any unit . and the system is more elastic as the Price elasticity is more than 1.