Question

If own-price elasticity of demand equals 0.3 in absolute value, then what percentage change in price will result in a 6% decrease in quantity demanded?

Answer 1

Answer:

change in price= 20 percentage

Answer 2

Answer:

20% is the Correct Answer

Explanation:

Percentage change in price = △P/P×100=−0.2×100=(−)20%

Elasticity of demand (Ed)= △Percentage change in quantity demanded / △Percentage Change in Price

Percentage change in price= 0.3*-20= 6 per cent

Percentage change in quantity demanded =0.3×(−20)%=6%

Percentage change in quantity demanded =6%.

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