Summary and Solutions - 13

Goods with price elasticities greater than 1.0 are called elastic

(By the way, the answer is 3.0. )

A fall in sales of 200 containers per week, on initial sales of 500 containers per week is a 40% decrease. A 20 cent increase in price per container, on a base price of $1.50, is a 13.3% increase in price. 40% / 13.3% = 3.0