CMA 1294 1-19, If a product has a price elasticity of demand of 2.0, how will be the demand?

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The price elasticity of demand for a product tells you:
Posted by:
Kishor Vadher
24-March-2015

A - Perfectly elastic. B - Perfectly inelastic. C - Elastic. D - Inelastic.

Accounting Auditing Peachtree

Question added by محمد الباجوري , Senior ERP Consultant & ERP Project Manager , XERVON GmbH
Date Posted: 2013/06/25

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2 Answers

by Animesh Awasthy , Assistant Manager , HDFC Bank Ltd.

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by Jay Fresnido , Total Rewards Analyst (Assistant Manager Level) , Al Futtaim Group

Answer (C - Elastic) is correct.
The price elasticity of demand is the percentage change in quantity demanded divided by the percentage change in price.
If the elasticity coefficient is greater than one, demand is elastic.
Hence, an elasticity of2.0 is elastic.

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