The price elasticity of demand for a printer is estimated to be 1 no matter what the price or quantity demanded.An increase in price by 10% will
A)Increase quantity demanded by 10%
B)Decrease quantity demanded by 10%
C)Increase demand by 10%
D)Decrease demand by 10%

Question

Quizplus · Accepted Answer

Since the price elasticity of demand is 1, a 10% increase in price would result in a 10% decrease in quantity demanded. This shows that the demand is elastic and a small increase in price will lead to a proportionately larger decrease in quantity demanded.

The Price Elasticity of Demand for a Printer Is Estimated