emilydevoll7223 emilydevoll7223
  • 15-07-2017
  • Business
contestada

If elasticity of demand is 0.5, and the price is lowered from $20 to $19, by what percentage will quantity demanded rise?

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meerkat18
meerkat18 meerkat18
  • 27-07-2017
To find the percentage of demand rise, the formula is 

Elasticity = (percentage change of demand/percentage change of price)

Elasticity is equal to 0.5. The percentage change of price is:
Percentage change of rise = (20-19)/20 * 100 = 5%
Then,

0.5 = Percentage change in demand/5%
Percentage change in demand = 2.5%
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