question archive If the own-price elasticity of demand is -0
If the own-price elasticity of demand is -0
Subject:BusinessPrice:2.87 Bought7
| If the own-price elasticity of demand is -0.7, then: |
A 10% increase in price gives rise to a 7% decrease in quantity demanded
A 10% increase in price leads to a 7% increase in quantity demanded
A 1% change in quantity demanded gives rise to a -0.7% change in price
A 1% increase in price leads to a 7% decrease in quantity demanded
None of the above
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Answer:
option 1
Price elasticity of demand=% change in the quantity/%change in price
where increase denotes positive % and decrease negative%
we are going to check one by one the option
1) A 10% increase in price gives rise to a 7% decrease in quantity demanded
Pe=-7/10=-0.7
Thie is true
