Answer of Mock1 Q37 missing

CFA Level I
#1

I found that for the AM Mock 1 Q37, they did not provide the answer for this question, does any body know the correct answer?

Over a given period, the price of a commodity falls by 5.0%, and the quantity demanded rises by 7.5%. The price elasticity of demand for the commodity is best described as:

A. elastic

B perfectly elastic

C inelastic

my calculated answer is (-0.075)/(-0.05) = 0.6 < 1 so its inelastic/

Please correct me if im wrong. Thanks a lot!

#2

P falls so -5%, q rises so +7.5%. 0.075/(-0.05)= -1.5 not 0.6. Demand should be elastic.

An addiional note,

if %change in q is more than % change in p-demand is elastic

if % change in q is less than % change in p- demand is inelastic

Regards,

David.

#3

yes

#4