Suppose the price elasticity of demand for lager is 2 and the price of lager increases by 15 percent. The quantity demanded will change by _____.
A) 15%
B) 20%
C) 30%
D) 10%

Question

Quizplus · Accepted Answer

The quantity demanded will change by 30%. Price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. With an elasticity of 2 and a price increase of 15%, the quantity demanded will decrease by 2 * 15% = 30%.

Suppose the Price Elasticity of Demand for Lager Is 2