Calculating Elasticity and Percentage Changes

Read this article on how to estimate elasticity. Make sure to answer the "Try It" questions.

Try It

Question 1

A life sustaining medicine would most likely have a price elasticity of demand ________.

    • close to zero
    • above 1.0
    • equal to 1.0

Question 2

Which of the following items is most likely to have price elasticity of demand above 1.0?

    • airline tickers
    • salt
    • traditional textbooks