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23 November, 03:40

Measuring the price of gasoline in dollars, an economist calculates the price elasticity of demand to be -.5. What would the price elasticity of demand be if the economist had chosen to measure the price of gasoline in pennies rather than dollars?

A. -.005

B ...-5

C. -.05

D. - 50

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Answers (1)
  1. 23 November, 03:55
    0
    (D) - 50

    Explanation:

    1 dollar is equivalent to 100 pennies

    The price elasticity of demand measuring the price of gasoline in dollars = - 0.5

    The price elasticity of demand measuring the price of gasoline in pennies would be - 0.5*100 = - 50
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