Let the short-run price elasticity of demand be -0.10. This suggests that if the price of electricity rises from $0.05 to $0.06/kWh, that the quantity demanded of electricity will
Decrease 1% |
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Decrease 2% |
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Decrease 10% |
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Decrease 50% |
Option 2
P |
Q |
%P |
%Q |
Ed=%Q/%P |
0.05 |
2 |
|||
0.06 |
1.96 |
=((0.06-0.05)/0.05)*100 =20% |
=((1.96-2)/2)*100 =-2% |
-2%/20% =-0.1 |
From the above table we can observe that the quantity decreases by 2%
Let the short-run price elasticity of demand be -0.10. This suggests that if the price of...
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