SOLUTION: 4. Given a 15% increase in a good's price and a 25% decrease in quanitity demanded for the good by a consumer, which of the following types of elasticity best describes the demand

Question 657971: 4. Given a 15% increase in a good's price and a 25% decrease in quanitity demanded for the good by a consumer, which of the following types of elasticity best describes the demand curve for the consumer?
a.Constant-elasticity
b. Unit Elastic
c. Elastic
d. Inelastic
Any help is appreciated..Thank you!

Answer by lostin(9) (Show Source): You can put this solution on YOUR website!
Elasticity of demand curve is (DQ/Q)/(DP/P)
Q is demand and P is price of good.
In our case E = (-0.25)/(0.15) = -1.66
- sign is for decrease in sale.
For this values of demand curve we say elastic or relative elastic. Now in given data we have only one point with us and cannot comment whether this elasticity is constant or not. But Based on available data we can only say that demand curve is elastic. ( To say constant or not, you need to have at least 2 points, As far as I understand)
http://en.wikipedia.org/wiki/Price_elasticity_of_demand
Catch me @ akash.aerokgp@gmail.com

RELATED QUESTIONS
Good Day, Got no reply to this question. The demand curve for a swivel chair is given... (answered by MathLover1,Theo)

The demand and supply curves for a good are given as Pd=100-(q+4)^2 and Ps=(q+2)^2... (answered by jorel1380)

2. Consider the supply of computers. For each of the following, state the effect on... (answered by Big Poop)

The price of a refrigerator decrease by 20%and then by 25%. By what percent must the... (answered by josgarithmetic)

Hello! I've a conundrum here! A company believes that there is a linear relationship... (answered by rwm)

The demand curve for a swivel chair is given by p=4000^(3-q) dollars per swivel chair,... (answered by CPhill)

The demand and supply equation for a commodity are given by Demand: P=50-3D Supply:... (answered by lynnlo)

This is a question from my Economics Course. No one in my group can figure it out. We are (answered by scott8148)

QUESTION 4 The revenue function of a company is R = 36q � 2q�, where p represent the... (answered by stanbon)