Asked by Maricris Tersol on Jun 01, 2024
Verified
If a 1% change in price leads to a 0.5% change in quantity demanded,then elasticity of demand is
A) 0.5.
B) 1.0.
C) 1.5.
D) 5.
Elasticity of Demand
A measure of how the quantity demanded of a good or service changes in response to a change in its price.
Quantity Demanded
The total amount of a good or service that consumers are willing and able to purchase at a given price level in a specified time period.
- Grasp the idea of demand's price elasticity and the procedure for its computation.
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
A
Explanation :
Elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price, which in this case is 0.5% / 1% = 0.5.
Learning Objectives
- Grasp the idea of demand's price elasticity and the procedure for its computation.