Question 7
MediumOriginal questionThe price elasticity of demand for a good is 0.8. If its price rises by 5%, its quantity demanded will
Show the answer and explanation
CorrectNot quiteAnswer B
Correct answer: B
Explanation
% change in quantity = 0.8 × 5% = 4%.
A price rise lowers the quantity demanded, so it falls by 4%.
- Concept
- Predicting a fall in quantity
- Typical timeTypical
- 70 s
- Your timeYours
- —
Practise this chapter →
Ten questions from Price Elasticity of Demand, at your own pace.