College logo water bottles priced at $12 sell at a rate of 30 per week, but when the bookstore marks them down to $8, it finds that it can sell 45 water bottles per week. what is the price elasticity of demand for the water bottles?
The price elasticity of demand is 1. You determine price elasticity by dividing the percent change in quantity demanded (there was a 150% change from 30 to 45) by the percent change in price (there was a 150% change from $12 to $8). 150/150=1.
