Fantastic cuts hair salon knows that a 15% increase in the price of their haircuts will result in a 5% decrease in the number of haircuts sold. what is the elasticity of demand facing fantastic cuts? a. -0.05 b. -0.10 c. -0.33 d. none of the above

C. -0.33

Explanation:

Elasticity is a microeconomic concept that aims to measure the sensitivity of demand in the face of price changes. To calculate the price elasticity of demand, a formula is used that divides the observed change in quantity (Q) by the change in price (P).

Elasticity = ▲ Q / ▲ P

We know that the price change was 15% = 0.15

We know that the change in quantity was -5% = -0.05

So:

Elasticity = -0.05 / 0.15 = -0.33

Plus: when the value of elasticity is less than 1, we say that demand is inelastic - little price sensitive. When elasticity is greater than 1, we say that demand is elastic (price sensitive).

In this case, the demand for haircutting is inelastic.

you don't if you paid you paid. it's like if i bought a computer and used it then i say idon't want it anymore so im gonna return it. you can't. unlkess you have your reciept

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