Given that the own-price elasticity of demand for shoes is -2.6,if the price of shoes rises by 8%,what will happen to the quantity of shoes demanded?
A)It will decrease by 20.8%
B)It will increase by 20.8%
C)It will decrease by 2.6%
D)It will decrease by 2.6%.

Question

Quizplus · Accepted Answer

The formula to calculate the percentage change in quantity demanded is:
% change in quantity demanded = own-price elasticity of demand x % change in price
Substituting the given values, we get:
% change in quantity demanded = -2.6 x 8
% change in quantity demanded = -20.8
Therefore, the quantity of shoes demanded will decrease by 20.8%. Hence, the answer is A.

Given That the Own-Price Elasticity of Demand for Shoes Is