The price elasticity of demand coefficient, rounded to one decimal place is 1.5
How to calculate price elasticity of demand
Change in price = $48 - $40
= $8
% change in price = 8/48 × 100
= 16.67%
change in quantity demanded = 500 - 400
= 100
% change in quantity demanded = 100/400 × 100
= 25%
Price Elasticity of Demand = percent change in quantity ÷ percent change in price
= 25% ÷ 16.67%
= 1.49970005998800
Approximately, 1.5
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