Chris runs a sporting goods store and knows that the price elasticity of demand for his sports clothing line is -1.5.He is planning to lower prices by 10%.The percentage change in quantity demanded will be:
A) 15%.
B) 0.15%.
C) 6.66%.
D) 0.06%.
E) 8.50%.

Question

Quizplus · Accepted Answer

The price elasticity of demand formula is: % change in quantity demanded = elasticity * % change in price. Here, -1.5 * (-10%) = 15%.

Chris Runs a Sporting Goods Store and Knows That the Price