To keep the percentage change in quantity demanded equally proportional to the percentage change in price when the prices rise by 5 percent,a consumer would need to ________ quantity demanded by ________.
A) increase; 5 percent
B) decrease; 5 percent
C) increase; 10 percent
D) decrease; 10 percent
E) increase; 2 percent

Question

Quizplus · Accepted Answer

To maintain the percentage change in quantity demanded equally proportional to the percentage change in price, if the price rises by 5 percent, the consumer would need to decrease quantity demanded by 5 percent. This keeps the elasticity of demand constant.

To Keep the Percentage Change in Quantity Demanded Equally Proportional