When the local grocery store puts cereal on sale, reducing its price from $4.40 per item to $3.40 per item, the quantity sold increases from 220 per week to 230 per week.

2. What formula is used to determine the percentage change in quantity demanded?

3. What is the percentage change in quantity demanded for the cereals described above?

4. What formula is used to determine the percentage change in price?

5. Calculate the percentage change in price for the cereal.

6. Finally, using the whole formula, calculate the value of the price elasticity of demand for cereal.

7. Explain what this result means in words.