The price for a 27 inch TV = $450. Consumers buy 1000 of them, prices rises to $550 by 600 of them. What is the price elasticity of demand in this range? Show your complete solution and provide a brief explanation.

The price elasticity of demand can be calculated using the formula: E = (% change in quantity demanded) / (% change in price) In this case, the initial price is $450 and the quantity demanded is 1000. When the price increases to $550, the quantity demanded decreases to 600. The % change in quantity demanded can be calculated as: ((600-1000)/1000) * 100% = -40% The % change in price can be calculated as: ((550-450)/450) * 100% = 22.22% Plugging these values into the formula, we get: E = (-40%/22.22%) = -1.8 Since the elasticity of demand is negative, we can conclude that the product is relatively price sensitive. A value of -1.8 suggests that for every 1% increase in price, the quantity demanded will decrease by 1.8%.