Answered

Discover answers to your most pressing questions at Westonci.ca, the ultimate Q&A platform that connects you with expert solutions. Discover detailed solutions to your questions from a wide network of experts on our comprehensive Q&A platform. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

if the price elasticity of demand for a good is 0.8, then a 12 percent increase in the quantity demanded must be the result of

Sagot :

nuhulawal20

A 12 percent increase in the quantity demanded must be the result of a 15% decrease in the price.

Given the data in the quest;

  • Price Elasticity of demand; [tex]_PE_d = 0.8[/tex]
  • Increase in the Quantity demanded; [tex]Q_d = 12\% = 0.12[/tex]

Price elasticity of demand [tex]_PE_d[/tex] is simply the estimate of the difference in the quantity purchased of a product with respect to the difference in its price.

Now, Price elasticity of demand [tex]_PE_d[/tex] by Percentage Method:

[tex]_PE_d[/tex]  = percentage change in quantity demand / percentage change in price

[tex]_PE_d =\frac{q_1-q_2}{q_1}\ *\ \frac{p_1}{p_2-p_1}[/tex]

That is; [tex]_PE_d =\frac{Q_d}{percentage\ change\ in\ price}[/tex]

We substitute in our values

[tex]0.8 = \frac{0.12}{percentage\ change\ in\ price}[/tex]

[tex]Percentage\ change\ in\ price = \frac{0.12}{0.8}[/tex]

[tex]Percentage\ change\ in\ price = 0.15 = 15\%[/tex]

Therefore, A 12 percent increase in the quantity demanded must be the result of 15% decrease in the price.

Learn more; https://brainly.com/question/24904215

Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Keep exploring Westonci.ca for more insightful answers to your questions. We're here to help.