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Suppose that Mimi plays golf 5 times per month when the price is $40 and 4 times per month when the price is $50. What is the price elasticity of Mimi's demand curve?

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hyderali230

Answer:

Price Elasticity of Demand of Mimi's -1.25.

Explanation:

Price Elsticity of demand = % change in demand /  % change in price

Price Elsticity of demand = 25% / -20%

Price Elsticity of demand =  0.25 / -0.20

Price Elsticity of demand = -1.25

Percentage change in demand = ( ( 5 - 4 ) / 4 ) x 100 = 25%

Percentage change in price = ( ( 40 - 50 ) / 50 ) x 100 = -20%

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