If the price elasticity of demand for a product is 2.3,this means that quantity demanded will increase by _______ for each _______ decrease in price,ceteris paribus.
A) 1 percent;2.3 percent
B) 1 unit;$2.30
C) 2.3 percent;1 percent
D) 2.

Question

Quizplus · Accepted Answer

A price elasticity of demand of 2.3 means that for every 1% decrease in price, quantity demanded will increase by 2.3%. Therefore, the correct answer is C. Option A is incorrect because quantity demanded will not increase by 2.3% for every 1% decrease in price. Option B is incorrect because the price elasticity of demand refers to the percentage change in quantity demanded divided by the percentage change in price, not the dollar amount. Option D is incomplete and does not provide a clear answer.

If the Price Elasticity of Demand for a Product Is