During last year the price of regular unleaded gasoline in Oakland,California increased 11.0 percent.If the price elasticity of demand for gasoline was 0.13,the price hike means that the quantity demanded decreased by
A) 1.43 percent.
B) 8.46 percent.
C) 0.16 percent.
D) 4.31 percent.
E) 6.46 percent.

Question

Quizplus · Accepted Answer

The quantity demanded decreased by 1.43 percent, calculated using the price elasticity of demand formula: Percentage Change in Quantity Demanded = Price Elasticity of Demand * Percentage Change in Price. Here, 0.13 * 11.0% = 1.43%.

During Last Year the Price of Regular Unleaded Gasoline in Oakland,California