If E_d = 4, then A) a price increase of 1% will reduce quantity demanded by 4%. B) a price increase of 1% will increase quantity demanded by 4%. C) a price decrease of 1% will decrease quantity demand by 4%. D) the slope of the demand curve is equal to 4.

Question

Quizplus · Accepted Answer

The given expression E_d = 4 represents the price elasticity of demand, which measures how much the quantity demanded of a good responds to a change in the price of that good. A value of 4 indicates that a 1% increase in price will lead to a 4% decrease in quantity demanded, making option A correct.

If Ed = 4, Then

If E_d = 4, Then