The price of hot dogs increases by 22% and the quantity of hot dogs demanded falls by 25%. This indicates that demand for hot dogs is :

Elastic

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Inelastic

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Unitarily elastic

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Perfectly elastic

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Solution

The correct option is A Elastic
Price elasticity of demand
$= - \frac{% Δ Q}{% Δ P} = \frac{25 %}{22 %}$
$= 1.13$
Since price $E > 1$ , therefore demand for goods is elastic.

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The price of hot dogs increases by 22% and the quantity of hot dogs demanded falls by 25%. This indicates that demand for hot dogs is :

The correct option is A ElasticPrice elasticity of demand=−%ΔQ%ΔP=25%22%=1.13Since price E>1, therefore demand for goods is elastic.

The correct option is A Elastic
Price elasticity of demand
$= - \frac{% Δ Q}{% Δ P} = \frac{25 %}{22 %}$
$= 1.13$
Since price $E > 1$ , therefore demand for goods is elastic.