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

Question

Quizplus · Accepted Answer

The own price elasticity of demand formula is 
% change in quantity demanded / % change in price = |E|
-1.5 = % change in quantity demanded / 6
% change in quantity demanded = -1.5 * 6 = -9%
Therefore, a 6% decrease in price will result in a 9% increase in quantity demanded. Therefore, the correct answer is B.

The Own Price Elasticity of Demand for Apples Is −1