Question

If the price elasticity of demand for a good is 0.25, then a 20 percent decrease in price results in a

A. 0.0125 percent increase in the quantity demanded.
B. 4 percent increase in the quantity demanded.
C. 5 percent increase in the quantity demanded.
D. 80 percent increase in the quantity demanded.

Answer 1

B

Step-by-step explanation:

100÷2=5 because if 20 percent was decreased then the quantity must have increased by 5 due to difference