Assume the own price elasticity of demand for a product is equal to -0.43. if there is a 10% increase in price, how many percentage points will quantity demanded decline?

Question

asked Jan 26, 2020 177k views

1 Answer

Keflavich · Answer 1 · 2020-02-01T09:52:52+0000

Answer: 4.3%

Step-by-step explanation:

Given that,

price elasticity of demand = -0.43

% change in price = 10%

price elasticity of demand =
$(Percentage\ change\ in\ quantity\ deamnded)/(percentage\ change\ in\ price)$

0.43 =
$(Percentage\ change\ in\ quantity\ deamnded)/(10)$

0.43 × 10 = Percentage change in Quantity demanded

Percentage change in Quantity demanded = 4.3%

Therefore, quantity demanded will decline by 4.3%.