Question : Let's say that a 5% price increase causes the quantity demanded to fall by 10%. Demand's own-price elasticity is equal to:
Option 1: 2
Option 2: 0.5
Option 3: 5
Option 4: None of the above
Correct Answer: 2
Solution : The elasticity of demand (Ed)= Percentage change in quantity demanded / Percentage Change in Price The elasticity of demand (Ed)= 10%/5%=2 Hence option a is the correct answer.
Question : If the price elasticity of demand for a good is -0.5, then a 10% increase in price will result in a:
Question : If the price elasticity of demand for a good is -1.5, then a 10% increase in price will result in a:
Question : If the price elasticity of demand for a good is 0.8, then a 10% increase in price will result in a:
Question : If the price elasticity of demand for a good is 2.5, then a 10% decrease in price will result in a:
Question : If the price elasticity of demand for a good is 1.2, then a 10% decrease in price will result in a:
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