If the price elasticity of demand for cigarettes is -0.50 and the price of cigarettes increases 10 percent, the quantity demanded of cigarettes decreases by 50 percent.

Name: If the price elasticity of demand for cigarettes is -0.50 and the price of cigarettes increases 10 percent, the quantity demanded of cigarettes decreases by 50 percent.
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Question

Quizplus · Accepted Answer

The price elasticity of demand of -0.50 means that a 10% increase in price would lead to a 5% decrease in quantity demanded, not a 50% decrease.

If the Price Elasticity of Demand for Cigarettes Is -0