Question

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?

Answer 1

Answer:

quantity demanded will increase by 6%

Answer 2

Price elasticity of demand

Explanation:

Price elasticity of Demand is the responsiveness of Quantity demanded of a good in respect to change in price.

P.E.D. =     change in Qd/change in price X 100

if the P.E.D.= 0.6  means there is low responsiveness. Due to the nature that goods are inelastic in nature. That means even if the price falls there won't be a bigger responsive change in the quantity demanded of that good.

Now you see that price of goods fell by 10%,

So due to this relationship your Quantity demanded will stay in decrease bt 0.06

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