Answer:
Option "D" is the correct answer to the following statement.
Unit-Elastic
Explanation:
Given:
P0 = $7.50 per lbs
Q0 = 48 lbs
P1 = $9.00 per lbs
Q1 = 40 lbs
Price Elasticity Of Demand = ?
Computation:
[tex]Price \ Elasticity \ Of \ Demand = \frac{\frac{Q1-Q0}{\frac{Q1+Q0}{2} } }{\frac{P1-P0}{\frac{P1+P0}{2} } } \\Price \ Elasticity \ Of \ Demand = \frac{\frac{40-48}{\frac{40+48}{2} } }{\frac{9-7.50}{\frac{9+7.50}{2} } } \\Price \ Elasticity \ Of \ Demand = \frac{\frac{8}{\frac{88}{2} } }{\frac{1.50\\}{\frac{16.50}{2} } }\\ Price \ Elasticity \ Of \ Demand = \frac{\frac{8}{44} }{\frac{1.50}{8.25} } \\\\Price \ Elasticity \ Of \ Demand = 1[/tex]
So, Price Elasticity Of Demand = 1 (Unit-Elastic)
