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Kirby White
on Nov 25, 2024

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Suppose we find that the price elasticity of demand for a product is 1.25 when its price is increased by 8 percent. We can conclude that quantity demanded

A) increased by 0.16 percent.
B) decreased by 10 percent.
C) decreased by 0.8 percent.
D) decreased by 0.16 percent.

Price Elasticity of Demand

The response level of the demand for a product to variations in its price, determined by dividing the percentage change in the demanded quantity by the percentage change in the price.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price.

  • Analyze the correlation between price changes and demanded quantity by referencing the elasticity coefficient.
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nuvia alonsoNov 26, 2024
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