If the price of downloaded music falls by 10% and the quantity demanded of downloaded music increases by 20%, then the price elasticity of demand equals 2.

Name: If the price of downloaded music falls by 10% and the quantity demanded of downloaded music increases by 20%, then the price elasticity of demand equals 2.
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Question

Quizplus · Accepted Answer

The price 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.

If the Price of Downloaded Music Falls by 10% and the Quantity