If the price elasticity of demand is 2 then a 4% increase in the price of the product can be expected to reduce quantity demanded by 8%.

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The price elasticity of demand measures the responsiveness of quantity demanded to changes in price. A price elasticity of demand of 2 means that for every 1% increase in price, quantity demanded will decrease by 2%. Therefore, a 4% increase in price can be expected to reduce quantity demanded by 8%.

If the Price Elasticity of Demand Is 2 Then a 4