Answer:
Option D.
Explanation:
Given information:
[tex]Q_1=200, Q_2=400[/tex]
[tex]P_1=225, P_2=175[/tex]
Formula for price elasticity of demand is
[tex]E_d=\frac{Q_2-Q_1}{P_2-P_1}\times \frac{P_1+P_2}{Q_1+Q_2}[/tex]
Substitute the given values in the above formula.
[tex]E_d=\frac{400-200}{175-225}\times \frac{225+175}{200+400}[/tex]
[tex]E_d=\frac{200}{-50}\times \frac{400}{600}[/tex]
[tex]E_d=-\frac{8}{3}[/tex]
[tex]E_d\approx -2.67[/tex]
Absolute value is
[tex]|E_d|= |-2.67|=2.67[/tex]
The absolute value of the price elasticity of demand for DVD players is 2.67.
Therefore, the correct option is D.
