The teenager company makes and sells skateboards at an average price of $70 each. During the past year, they sold 4000 of these skateboards. The company believes that the price elasticity for this product is about -2.5. If it decreases the price to $63, what should be the quantity sold?

I say the answer is 5000. Can anyone confirm?

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Originally Posted by ;

The teenager company makes and sells skateboards at an average price of $70 each. During the past year, they sold 4000 of these skateboards. The company believes that the price elasticity for this product is about -2.5. If it decreases the price to $63, what should be the quantity sold?

I say the answer is 5000. Can anyone confirm?

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Price elasticity is





125% of 4000 = 5000.

I get the same answer. No guarantees, but it looks right to me.