If the price elasticity of DVD recorders is-0.3 and price increases 20%,what happens to the quantity of DVD recorders demanded?
A)quantity decreases by 26%
B)quantity decreases by 6%
C)quantity increases by 15%
D)quantity increases by 21%

Question

Quizplus · Accepted Answer

Using the formula for price elasticity of demand:

% change in quantity demanded = % change in price x price elasticity of demand

% change in quantity demanded = 20% x -0.3

% change in quantity demanded = -6%

Therefore, the quantity of DVD recorders demanded would decrease by 6%.

If the Price Elasticity of DVD Recorders Is-0