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Calculation of Price Elasticity: Percentage change in quantity demanded: (80100)/100=0.20(80 100) / 100 = -0.20(80100)/100=0.20 or 20%-20\%20% Percentage change in price: (4.504.00)/4.00=0.125(4.50 4.00) / 4.00 = 0.125(4.504.00)/4.00=0.125 or 12.5%12.5\%12.5% Price Elasticity: 20%/12.5%=1.6-20\% / 12.5\% = -1.620%/12.5%=1.6 This result indicates that the demand for lattes is elastic, meaning the quantity demanded is highly sensitive to price changes

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