Price Elasticity Questions:

1) A market researcher notices that, when the price of good A is increased from $1 per unit to $2 per unit, the quantity demanded falls from 6000 to 5400 units of A per day.

Questions:

(a) Define the term "Price Elasticity of Demand."

(b) Calculate the price elasticity of demand for good A in the price range given.

(c) Is the demand for good A elastic or inelastic? Explain.

(d) Based on your answer in part (c), what are some of the characteristics of good A? Explain.