When the price of a hoola hoop is $10, 200 units are sold on the market.  When the price of a hoola hoop decreases to $8, 120 units are sold.   I. Calculate the price elasticity of demand at these price levels.   II. Does the law of demand hold? III. Is demand for hoola hoops elastic, inelastic, or unit elastic?

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter5: Price Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1SQP
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When the price of a hoola hoop is $10, 200 units are sold on the market.  When the price of a hoola hoop decreases to $8, 120 units are sold.  
I. Calculate the price elasticity of demand at these price levels.  
II. Does the law of demand hold?
III. Is demand for hoola hoops elastic, inelastic, or unit elastic?
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