Question

When the local grocery store puts cereal on sale, reducing its price from $4.40 per item to $3.40 per item, the quantity sold increases from 220 per week to 230 per week. 1. This illustrates the ________________ elasticity of _________________. 2. What formula is used to determine the percentage change in quantity demanded?

Answer 1

1 .Price elasticity of demand.

Step-by-step explanation:

For part (1), the situation which is described above is known as the price elasticity of demand.

For part (2), the formula for determining the percentage change in quantity demanded is:

((New quantity / Old quantity) - 1) * 100.

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