Answer (C) is correct . The price elasticity of demand is the percentage change in quantity demanded divided by the percentage change in price. If the elasticity coefficient is greater than one, demand is elastic. If the coefficient is less than one, demand is inelastic. When the percentage changes are calculated as the change over the range (the arc method), the coefficient for senior citizens indicates that demand is elastic: ? E d = [(150 – 82) ÷ (150 + 82)] ÷ [($8 – $6) ÷ ($8 + $6)] = (68 ÷ 232) ÷ ($2 ÷ $14) = 29.3% ÷ 14.3% = 2.05 The coefficient for weekends indicates that demand is inelastic: E d = [(223 – 221) ÷ (223 + 221)] ÷ [($20 – $15) ÷ ($20 + $15)]
Answer (A) is incorrect because Weekday demand is elastic.
Answer (B) is incorrect because Weekend demand is inelastic.
Answer (D) is incorrect because Weekday demand is elastic, and weekend demand is inelastic.
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Which one of the following is true?