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If a 10 percent rise in price leads to an 8 percent decrease in quantity demanded, the price...

Question:

If a 10 percent rise in price leads to an 8 percent decrease in quantity demanded, the price elasticity of demand is

A) 0.8.

B) 0.125.

C) 8.

D) 1.25.

E) 80.

Demand:

The term demand is a microeconomic topic and shows the changes in the quantity demanded of a product or service when its price changes in the market. Usually, a decline in price raises the quantity demanded and another way around.

Answer and Explanation: 1

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  • The correct option is A. 0.8.

The price elasticity of demand can be estimated as:

{eq}The~price ~elasticity~of~demand =...

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Price Elasticity of Demand in Microeconomics

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Chapter 2 / Lesson 11
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In microeconomics, the principle of price elasticity of demand is important to understand. Learn the definition of price elasticity of demand, understand the formula and its categories, and see some calculation examples.


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