Suppose there is a 10 per cent increase in the price of fish and a resulting five per cent decrease in the quantity of fish demanded. The price elasticity of demand for fish is:
A) 10
B) 5.0
C) 2.0
D) 0.5

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. Here, it is -5% / 10% = -0.5.

Suppose There Is a 10 Per Cent Increase in the Price