If the price elasticity of demand for a product is equal to 0.4, then a decrease in price of 8% will increase quantity demanded by A. 0.05 percent B. 20 percent C. 3.2 percent D. .32 percent
Added by Isabela C.
Step 1
So, if the price elasticity of demand is 0.4 and the price decreases by 8%, the percentage change in quantity demanded would be 0.4 * 8% = 3.2%. Show more…
Show all steps
Your feedback will help us improve your experience
Caroline Maroutian and 63 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
If a $10 \%$ decrease in the price of one product that you buy causes an $8 \%$ increase in quantity demanded of that product, will another $10 \%$ decrease in the price cause another $8 \%$ increase (no more and no less) in quantity demanded?
If a 10% decrease in the price of one product that you buy causes an 8% increase in quantity demanded of that product, will another 10% decrease in the price cause another 8% increase (no more and no less) in quantity demanded?
Find the elasticity of the demand function p + 4q = 80 when p = 40, and q = 10, and also tell how will a price increase affect total revenue.
Subash C.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD