We are using elasticity to find quantity, instead of the other way around. We will plug in what we know, and solve from there.
Elasticity =
And, in the case of John, %Change in Quantity = (X – 4)/4
Therefore :
Elasticity = 0.9 = |((X – 4)/4)/(% Change in Price)|
% Change in Price = (1.00 - 1.50)/(1.50) = -33%
0.9 = |(X – 4)/4)/(-33%)|
|((X - 4)/4)| = 0.3
0.3 = (X - 4)/4
X = 5.2
Since John probably can't buy fractions of hot dogs, it looks like he will buy 5 hot dogs when the price drops to £1.00 per hot dog.