Suppose that when the price rises by 10% for a particular good, the quantity demanded of that good falls by 20%. The price elasticity of demand for this good is equal to 2.0.

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, which in this case is -20% / 10% = -2.0 (ignoring the negative sign as elasticity is often considered in absolute terms).

Suppose That When the Price Rises by 10% for a Particular