Suppose that when the price of a good is $15, the quantity demanded is 40 units, and when the price falls to $6, the quantity increases to 60 units. The price elasticity of demand near a price of $6 and a quantity of 60 can be calculated as:

A.-5/6

B.-2

C.-2/9

D.-9/2

(A) - 5/6

Explanation:

Price elasticity of demand = % change in quantity demanded : % change in price

% change in quantity demanded = (60-40) / 40 * 100 = 20/40 * 100 = 50%

% change in price = ($6-$15) / $15 * 100 = - $9/$15 * 100 = - 60%

Price elasticity of demand = 50% : - 60% = - 5/6