A price elasticity of -2 means that a price reduction of one percent will result in ________.
A)a decrease in volume by 2%
B)a decrease in volume by 20%
C)an increase in volume by 2%
D)an increase in market share by 20%
E)a decrease in market share by 2%

Question

Quizplus · Accepted Answer

Price elasticity of -2 means that for a 1% decrease in price, there is a 2% increase in the quantity demanded.

A Price Elasticity of -2 Means That a Price Reduction