If the price elasticity of demand for a good is 3.0,what would result from a 10 percent increase in price
A)a 3 percent decrease in the quantity demanded
B)a 10 percent decrease in the quantity demanded
C)a 30 percent decrease in the quantity demanded
D)a 300 percent decrease in the quantity demanded

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. If the elasticity is 3.0, a 10% increase in price would lead to a 30% decrease in quantity demanded (3.0 * 10% = 30%).

If the Price Elasticity of Demand for a Good Is