Asked by mohammad uzair on Jun 01, 2024
Verified
If elasticity of demand is 10,a 1% increase in price will lower quantity demanded by
A) .1%.
B) 1%.
C) 10%.
D) 100%.
Elasticity of Demand
This term measures how sensitively the quantity demanded of a good responds to a change in its price; a rephrased definition of Elasticity related to demand.
- Acknowledge the principle and impact of demand's price elasticity.
Verified Answer
MJ
Morgan JohnsonJun 06, 2024
Final Answer :
C
Explanation :
The elasticity of demand measures the responsiveness of the quantity demanded to a change in price. An elasticity of 10 means that a 1% increase in price will result in a 10% decrease in quantity demanded, and vice versa. Therefore, the correct answer is C, as a 1% increase in price will lower quantity demanded by 10%.
Learning Objectives
- Acknowledge the principle and impact of demand's price elasticity.