Calculate the following. Wendy’s Wheels sells bicycles. At a price of $160 per bicycle, Wendy’s sells 40 bicycles per month. When it lowered its price to $150, sales rose to 48 bicycles per month.

Calculate the Price Elasticity of Demand of Wendy’s Wheels

=% change in quantity / % change in price or
[(48 - 40) / 40 = .2] / [(150 - 160) / 160 = -.0625]
= .2/-.0625 = -3.2