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Taya2010 [7]
3 years ago
6

If the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good, then

how is the demand for the good characterized?
Business
2 answers:
jasenka [17]3 years ago
8 0

Answer:

Price Elastic

Explanation:

We know that

The formula to compute the price elasticity of demand is shown below:

= (Percentage change in quantity demanded) ÷ (percentage change in price)

The classification as follows

1. Perfectly inelastic = If zero  

2. Inelastic = When elasticity is below than one

3. Unitary elastic = When elasticity is equal to one

4. Elastic = When elasticity is exceeded than one

5. Perfectly elastic = When elasticity is in infinity

Since the  percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good which reflects that the elasticity is more than one

kykrilka [37]3 years ago
8 0

Answer:

<em>The demand is price elastic in nature because it is greater than 1.</em>

Explanation:

Price Elasticity of demand refers to the response of quantity demanded of a good to the change in price. Of course, when the price decreases, quantity demanded of a good increases and vice-versa but to how much degree is determined by the Price Elasticity of demand.

Mathematically, Price Elasticity of Demand is the ratio of % change in quantity demanded of a good and % change in the price of a good i.e.

<em>Price Elasticity of Demand = % change in quantity demanded of a good / % change in the price of a good</em>

In the problem, since <em>the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good, the above ratio will be greater than 1. Hence, the demand of the good is price elastic.   </em>

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Suppose that the market demand curve for scooters is given by P = 300 - 5Q, where P is the price and Q is total industry output.
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