If the price elasticity of demand for a good is 4,then a 12 percent decrease in price results in a
A)0.33 percent increase in the quantity demanded.
B)3 percent increase in the quantity demanded.
C)30 percent increase in the quantity demanded.
D)48 percent increase in the quantity demanded.

Question

Quizplus · Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. If the elasticity is 4, then a 12% decrease in price results in a 48% increase in quantity demanded (4 * 12% = 48%).

If the Price Elasticity of Demand for a Good Is