Question

According to​ Duffy-Deno (2003), when the price of broadband access capacity​ (the amount of information one can send over an internet​ connection) increases​ 10%, commercial customers buy about​ 3.8% less capacity.
What is the elasticity of demand for broadband access capacity for​ firms?

Answer 1

Answer:

Price Elasticity of 'Broadband Access Capacity' Demand (for firms) = 0.38

Explanation:

Price Elasticity of demand = % change in demand / % change in price

% change in demand = 3.8% ;  % change in price = 10%  [Given]

Putting in above formula ; P.Ed = 3.8 / 10 = 0.38