The elasticity of demand for fish is estimated to be 3.If this estimate is accurate,then a 3% rise in price will
A)increase quantity demanded by 1%.
B)increase quantity demanded by 9%.
C)decrease quantity demanded by 1%.
D)decrease quantity demanded by 3%.
E)decrease quantity demanded by 9%.

Question

Quizplus · Accepted Answer

The elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in price. With an elasticity of 3, a 3% rise in price would lead to a 9% decrease in quantity demanded (3 times 3%), hence option E is correct.

The Elasticity of Demand for Fish Is Estimated to Be