Suppose a 10 per cent increase in the price of textbooks decreases the quantity demanded by 20 per cent. The elasticity of demand for textbooks is
A) 10.0.
B) 0.2.
C) 2.0.
D) 5.0.

Question

Quizplus · Accepted Answer

The elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price, which in this case is -20% / 10% = -2.0, indicating an elasticity of 2.0.

Suppose a 10 Per Cent Increase in the Price of Textbooks