Question 18
HardOriginal questionThe price elasticity of demand for a good is 1.2. Its price rises by 10%. If 1,000 units were sold before, how many are sold now?
Show the answer and explanation
CorrectNot quiteAnswer A
Correct answer: A
Explanation
% change in quantity = 1.2 × 10% = 12%, a fall.
New quantity = 1,000 × 0.88 = 880.
- Concept
- Predicting sales after a price rise
- Typical timeTypical
- 100 s
- Your timeYours
- —
Practise this chapter →
Ten questions from Price Elasticity of Demand, at your own pace.