If the price elasticity of demand for a product is equal to 0.5, then a decrease in price of 10 percent will increase quantity demanded by

A) 20 percent.
B) 0.5 percent.
C) 5 percent.
D) 0.05 percent.

If the price elasticity of demand for a product is equal to 0.5, then a 10 percent decrease in price will result in a 5 percent increase in quantity demanded. This is because a 0.5 price elasticity of demand means that for every 1 percent change in price, there is a 0.5 percent change in quantity demanded. Therefore, a 10 percent decrease in price will result in a 5 percent increase in quantity demanded.