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meriva
3 years ago
14

The price of milk at the local grocery store is cut by 15%. In response to the price cut, the quantity of milk demanded falls by

5%. The absolute value of the price elasticity of demand for milk is _____, and the price elasticity of demand is
Business
1 answer:
Crank3 years ago
6 0

Answer:

the absolute value is -0.33 and it is inelastic

Explanation:

The computation is shown below:

The Absolute value of Price Elasticity of Demand (PED) is

= Percentage Change in Quantity Demanded ÷ Percentage Change in Price

= 0.05 ÷ (-0.15)

= -0.33

Since the price elasticity of demand is less than one so here there is an inelastic demand

Therefore the absolute value is -0.33 and it is inelastic

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