If the price elasticity of demand for Clean Sheets laundry detergent is 0.50, a 2 percent increase in the price will lead to which of the following?
A)a 0.50 percent increase in quantity
B)a 0.50 percent decrease in quantity
C)a 1 percent increase in quantity
D)a 1 percent decrease in quantity

Question

Quizplus · Accepted Answer

A price elasticity of demand of 0.50 indicates that for every 1 percent increase in price, quantity demanded will decrease by 0.50 percent. Therefore, a 2 percent increase in price will lead to a 1 percent decrease in quantity demanded.

If the Price Elasticity of Demand for Clean Sheets Laundry