According to the text,the price elasticity of demand for oranges has been estimated to be -0.62.This implies that a doubling of the price of oranges would cause the quantity demanded of oranges to:
A)increase by 6.2 percent.
B)decrease by 6.2 percent.
C)increase by 62 percent.
D)decrease by 62 percent.

Question

Quizplus · Accepted Answer

A price elasticity of demand of -0.62 means that a 1% increase in the price of oranges would result in a 0.62% decrease in the quantity demanded. Therefore, a doubling of the price would result in a 2 x 0.62% = 1.24% decrease in the quantity demanded, or a decrease of 62%.

According to the Text,the Price Elasticity of Demand for Oranges