Need marketing help with a Homework question about price elasticity of demand

timer Asked: Nov 23rd, 2015
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Question Description

John, the new marketing manager of Doc’s Cola recently decided to increase the bottle of soda by 5 cents. He needs to calculate the correct formula for the calculation of price elasticity of demand. Which calculation below is the correct formula for price elasticity?

E = percent change in price/percent change in demand

E = percent change in demand/percent change in price

E = percent change in demand/percent change in supply

E = percent change in supply/percent change in demand

Tutor Answer

School: Rice University

Thank you for the opportunity to help you with your question!

E = percent change in demand/percent change in price

The Price Elasticity of Demand  measures the rate of response of quantity demanded due to a price change.

Please let me know if you need any clarification. I'm always happy to answer your questions.

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