According to the text,the price elasticity of demand for bath tissue has been estimated to be -2.42.This implies that a 10 percent decrease in the price of bath tissue would cause the quantity demanded of bath tissue to:
A)increase by 2.4 percent.
B)decrease by 2.4 percent.
C)increase by 24.2 percent.
D)decrease by 24.2 percent.

Question

Quizplus · Accepted Answer

The price elasticity of demand for bath tissue is -2.42. This means that a 1 percent decrease in the price of bath tissue would cause a 2.42 percent increase in the quantity demanded. Therefore, a 10 percent decrease in the price of bath tissue would cause the quantity demanded of bath tissue to increase by 24.2 percent (10 x 2.42 = 24.2). So, the correct answer is C, "increase by 24.2 percent".

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