If the price rises by 3% the quantity demanded falls by 1.5%.calculate and interpret the price elasticity of demand.

The price rises by 3%, so the % change in price is $+3\%$.
The quantity demanded falls by 1.5%, so the % change in quantity demanded is $-1.5\%$.

$$\text{PED} = \frac{-1.5\%}{+3\%}$$

$$\text{PED} = -0.5$$

The absolute value of PED is 0.5.

Since the absolute value of the Price Elasticity of Demand is 0.5, which is less than 1, the demand is inelastic. This means that a given percentage change in price leads to a smaller percentage change in quantity demanded.

The price elasticity of demand is $\boxed{\text{-0.5}}$. Demand is inelastic.