The own-price elasticity of demand for apples is -1.5.If the price of apples falls by 6%, what will happen to the quantity of apples demanded?
A)It will increase 4%.
B)It will increase 9%.
C)It will fall 4%.
D)It will fall 6%.

Question

Quizplus · Accepted Answer

The formula for calculating the percentage change in quantity demanded is given by:

Percentage change in quantity demanded = Own-price elasticity of demand x Percentage change in price

Substituting the given values, we get:

Percentage change in quantity demanded = (-1.5) x (-6%) = 9%

Therefore, the quantity of apples demanded will increase by 9% when the price of apples falls by 6%. Hence, the correct answer is option B.

The Own-Price Elasticity of Demand for Apples Is -1