If the price elasticity of demand for food is 0.03, then a 6 percent increase in the price of food will lead to a ________ decrease in quantity demanded.
A)0.018 percent
B)0.18 percent
C)1.8 percent
D)18 percent

Question

Quizplus · Accepted Answer

The price elasticity of demand tells you the percentage change in the quantity demanded of a good that results from a 1 percent change in price.  Thus, if the price elasticity of demand is 0.03 and price changes by 6 percent, then quantity demanded will change by 0.03 × 6 = 0.18 percent.

If the Price Elasticity of Demand for Food Is 0