It is Valentine's Day and Jason is desperately looking all over town for a dozen roses to give to Judy. Most likely, Jason's price elasticity of demand is:

a. infinitely large.

b. negative.

c. equal to one.

d. greater than one.

e. less than one.

e. less than one

Explanation:

Price elasticity of demand refers to percentage change in quantity demanded with respect to percent change in price. It is given by the following formula:

Price elasticity of demand = ΔQ/ΔP * P/Q

where ΔQ = change in quantity

ΔP = change in price

P = Base year price

Q = Base year quantity

In the current case, Jason will not be much bothered by a rise in price of roses owing to the occasion wherein roses are a necessity to him. Hence his demand would be inelastic.

An inelastic demand would lie between 0 and 1. Thus, the correct option is e. less than one