Suppose that Mimi plays golf 5 times per month when the price is 40 and 4 times per month when the price is 50 What is the price elasticity of Mimi's demand curve? 1.0 D 0.11 0.8 10.0

To calculate the price elasticity of demand, we use the formula:<br /><br />\[<br />\text{Price Elasticity of Demand} = \frac{\%\text{ Change in Quantity Demanded}}{\%\text{ Change in Price}}<br />\]<br /><br />First, let's calculate the percentage change in quantity demanded:<br /><br />- Initial quantity demanded: 5 times<br />- New quantity demanded: 4 times<br /><br />\[<br />\%\text{ Change in Quantity Demanded} = \frac{4 - 5}{5} \times 100\% = \frac{-1}{5} \times 100\% = -20\%<br />\]<br /><br />Next, calculate the percentage change in price:<br /><br />- Initial price: \$40<br />- New price: \$50<br /><br />\[<br />\%\text{ Change in Price} = \frac{50 - 40}{40} \times 100\% = \frac{10}{40} \times 100\% = 25\%<br />\]<br /><br />Now, plug these values into the elasticity formula:<br /><br />\[<br />\text{Price Elasticity of Demand} = \frac{-20\%}{25\%} = -0.8<br />\]<br /><br />The price elasticity of Mimi's demand curve is \(0.8\) (ignoring the negative sign which indicates the inverse relationship between price and quantity demanded). Therefore, the correct answer is:<br /><br />0.8