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Consider the market demand curve for apples, which relates the quantity demanded of apples (in thousands...

Consider the market demand curve for apples, which relates the quantity demanded of apples (in

thousands of bushels) to various prices of apples. Suppose that the price elasticity of demand for apples is -2.

If the price of apples increases by 3 percent, then by how much will the quantity demanded of apples

decrease?

Select one:

a. none of the above

b. by 2 thousand bushels

c. by 6 thousand bushels

d. by 6 percent

e. by 2 percent

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Answer #1

Answer = correct option is D

Reason =

Elasticity of demand = % change in quantity demanded / % change in price

Therefore,

% change in quantity demanded = - 2 × 3 = 6%

therefore , Quantity demanded of apple will be Decrease by 6 %

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