Given the price elasticity for a good as 0.6.Suppose this price of good decreases by 10%,what would we expect to happen to the quantity demanded ?
Answers
Explanation:
Brainly.in
What is your question?
Secondary School Economy 10 points
Given the price elasticity of demand for a good as 0.6. Suppose price of this good decreases by 10%, what would we expect to happen to the quantity demanded?
Ask for details Follow Report by Ssnklproy5 04.03.2020
Answers
Me · Beginner
Know the answer? Add it here!
dryomys Ambitious
The quantity demanded of this good increases by 6%.
Explanation:
Given that,
Price elasticity of demand for a good = 0.6
Percentage decrease in price = 10%
So, we have to find out the percentage change in quantity demanded.
The price elasticity of demand measures the responsiveness of the quantity demanded to changes in its price.
Price elasticity of demand = Percentage change in quantity demanded ÷ Percentage change in price
0.6 = Percentage change in quantity demanded ÷ 10
0.6 × 10 = Percentage change in quantity demanded
6 % = Percentage change in quantity demanded