Suppose there is a 10 per cent increase in the price of fish and a resulting five per cent decrease in the quantity of fish demanded.The price elasticity of demand for fish is:
A)10
B)5
C)2
D)1/2

Question

Quizplus · Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price, which in this case is -5% / 10% = -0.5, or 1/2 when considering the absolute value.

Suppose There Is a 10 Per Cent Increase in the Price