Price Elasticity of Demand Quiz

When the price elasticity of demand for Danny's brownies is 3, and the percentage change in price is 50%, what is the percentage change in quantity demanded, and what does this imply about the demand curve?

• A) 100%, demand is unit elastic

• B) 150%, demand is elastic

• C) 200%, demand is perfectly elastic

• D) 250%, demand is inelastic

Danny calculates that a 25% reduction in price leads to a 150% increase in sales. What is Danny's price elasticity of demand for brownies, and what does this suggest about the demand curve?

• A) 4, demand is inelastic

• B) 5, demand is unit elastic

• C) 6, demand is elastic

• D) 7, demand is perfectly elastic

Assuming the price elasticity of demand for Danny's brownies is 5, and he notices a 100% increase in sales after reducing prices, what is the percentage change in price, and what does it indicate about the demand curve?

• A) 10%, demand is perfectly inelastic

• B) 15%, demand is inelastic

• C) 20%, demand is elastic

• D) 25%, demand is unit elastic

If the percentage change in quantity demanded is 120% for Danny's brownies, and the price elasticity of demand is 4, what is the percentage change in price, and what implication does this have for the demand curve?

• A) 20%, demand is inelastic

• B) 30%, demand is elastic

• C) 40%, demand is perfectly elastic

• D) 50%, demand is unit elastic

If Danny's price elasticity of demand is 6, and the percentage change in quantity demanded is 200%, what is the percentage change in price, and what does this indicate about the demand curve?

• A) 20%, demand is inelastic

• B) 33.33%, demand is elastic

• C) 50%, demand is perfectly elastic

• D) 75%, demand is unit elastic

If lowering the price of brownies leads to a 300% increase in quantity sold and the price elasticity of demand is 6, what is the percentage change in price, and how does this affect the demand curve?

• A) 25%, demand is perfectly inelastic

• B) 33.33%, demand is inelastic

• C) 50%, demand is elastic

• D) 75%, demand is unit elastic

Given a price elasticity of demand of 4, if Danny increases his prices and sees a 40% decrease in quantity demanded, what is the percentage change in price, and what does it reveal about the demand curve?

• A) 5%, demand is perfectly inelastic

• B) 10%, demand is elastic

• C) 15%, demand is inelastic

• D) 20%, demand is unit elastic