Since the elasticity of demand can be defined as the measurement of the degree of the responsiveness of the quantity demand due to the change in the price level.
Price elasticity of demand= % change in the quantity demand/ % change in the price
=(+6%)/(-5%)
=1.20
Hence option third is the correct answer.
If a 5 percent decrease in the price leads to a 6 percent increase in the...
If a 2 percent increase in the price of a good leads to a 10 percent decrease in the quantity demanded, the price elasticity of demand for the good equals. a. 0.25 b. 5.0 c. 0.20 d. 2.0
If an 8% decrease in price leads to a 4% increase in the quantity demanded of the good, as a result of the price change, the total revenue for this product will: a) decrease b) increase c) not change d) double If a 12% increase in price leads to a 6% decrease in quantity demanded of the good, as a result of the price change, the total revenue for the product will: a) not change b) decrease c) increase d)...
An increase of 2 percent in price results in a decrease of 4 percent in quantity demanded. Using averages, the absolute value of the price elasticity of demand is?
A 5 percent increase in income leads to a 5 percent decrease in quantity demanded for a product. This product is a(n) product and demand is inferior; income inelastic normal; income inelastic inferior; unit income elastic normal; unit income elastic O O O
5. If a price change from P = 100 to P = 80 leads to an increase in the quantity demanded from Q = 100 to Q = 150, the price elasticity of demand is which of the following? When calculating the percentages, use the original price/quantity values. a. -2/5 b. -5/2 c. -1/5 d. -5 6. A 10 percent increase in the world price of corn is associated in the short run is associated with a 5 percent increase...
Suppose that a 10 increase in price results in a 50 percent decrease in quantity demanded. What does (the absolute value of) own price elasticity of demand equal? a) 0.5. b) 0.2. c) 5. d) 10.
Suppose the value of the price elasticity of demand is -3. What does this mean? A 1 percent increase in the price of the product causes demanded quantity to increase by 3 percent. A 3 percent increase in the price of the product causes demanded quantity to decrease by 1 percent. A1 percent increase in the price of the product causes demanded quantity to decrease by 3 percent. A US$1 increase in price causes demanded quantity to fall by 3...
incomeads to a percent decrease in quantity demanded for a product. This products and on income elastic product and demand or suppose the value of the price elasticity of demand is 3. What does this mean? AUS$1 increase in price causes demanded quantity to fall by 3 units. Al percent increase in the price of the product causes demanded quantity to increase by 3 percent A3 percent increase in the price of the product es demanded quantity to decrease by...
2. A Calculate the cross-price elasticity of demand between bread and butter where a 20 percent decrease in the price of bread results in a 50 percent increase in the quantity of butter demanded. Explain your answer. B. Calculate the income elasticity of demand for sweaters where a 10 percent increase in income leads to a 25 percent decrease in the quantity of sweaters demanded at a given price. What type of a good is a sweater? Why?
2. A Calculate the cross-price elasticity of demand between bread and butter where a 20 percent decrease in the price of bread results in a 50 percent increase in the quantity of butter demanded. Explain your answer. B. Calculate the income elasticity of demand for sweaters where a 10 percent increase in income leads to a 25 percent decrease in the quantity of sweaters demanded at a given price. What type of a good is a sweater? Why?