Homework Answers
Option C.
- Price elasticity of demand can be calculated as the change in quantity demanded with respect to the changes in a goods or a service's price.
- It can be calculated as given below :
PED = change in quantity demanded ÷ change in price.
-3 = Change in quantity demanded ÷ 1%
Change in quantity demanded = -3 * 1
= -3%//
Hence we can see that a one percent increase in the price of the product causes demand quantity to decrease by 3 percent.
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