If the price elasticity of demand is 0.1, then for every 10% increase in price, there is a _____ in quantity demanded.
A) 100% increase
B) 100% decrease
C) 1% increase
D) 1% decrease

Question

Quizplus · Accepted Answer

The price elasticity of demand measures how much the quantity demanded of a good responds to a change in the price of that good. A price elasticity of 0.1 means that for every 1% increase in price, the quantity demanded decreases by 0.1%. Therefore, for a 10% increase in price, the quantity demanded decreases by 1%.

If the Price Elasticity of Demand Is 0