When the price of toilet paper falls by 20 percent, the quantity of toilet paper demanded rises by 10 percent. Calculate the price elasticity of demand. Is the demand for toilet paper elastic, inelastic, or unit elastic?
What will be an ideal response?
Price elasticity of demand = [10/-20] = -0.5 . Since the absolute value of the price elasticity is less than one, the demand for toilet paper is inelastic.
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