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xxTIMURxx [149]
3 years ago
10

Price elasticity of demand is 4 (absolute value), if the price decreases by 1%, the quantity demanded will change

Social Studies
1 answer:
Alecsey [184]3 years ago
6 0

Answer: 4%

Explanation:

The Price elasticity of demand shows the amount that quantity demanded changes as a result of a change in price.

It is calculated as:

Price Elasticity of Demand = Percentage change in quantity / Percentage change in price

You have two of the above so use those two to find the percentage change in quantity:

Price Elasticity of Demand = Percentage change in quantity / Percentage change in price

4 = Percentage change in quantity / 1

4 * 1% = Percentage change in quantity

Percentage change in quantity = 4%

Quantity demanded increased by 4% as a result of a decrease of 1% in prices.

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