Calculate the absolute value of the elasticity of demand for a rise in price from $8 to $9 (which is associated with a fall in the quantity demanded from 3 to 2)

The absolute value of the elasticity of demand = 2.664.

Explanation:

a) Data and Calculations:

Change in price = $1 increase ($8 - $9)

Percentage of change in price = $1/$8 = 0.125

Change in quantity demand = 1 decrease (3 - 2)

Percentage of change in quantity demanded = 1/3 = 0.333

Price elasticity of demand = Percentage change in demand/Percentage change in price

= 0.333/0.125 = 2.664

b) Since the absolute value is more than 1, the elasticity of demand is price elastic.  A change in price causes a greater change in the quantity demanded.

2b2t

explanation:

2b2t

answer; trojan horse;