Answered

Get personalized and accurate responses to your questions with IDNLearn.com. Whether your question is simple or complex, our community is here to provide detailed and trustworthy answers quickly and effectively.

The price of product X is reduced from $120 to $100 and, as a result, the quantity demanded increases from 10 to 13 units. Therefore, demand for X in this price range:_____.
a. has declined.
b. is of unit elasticity.
c. is inelastic.
d. is elastic.

Sagot :

Parrainidn

Answer: d. is elastic.

Explanation:

A good is said to be elastic when its price elasticity of demand is greater than one.

Price elasticity of demand shows the change in quantity demanded as a result of a change in price.

Formula is:

= Percentage change in quantity demanded / Percentage change in price

Percentage change in price = (100 - 120) / 120 = -16.7%

Percentage change in quantity demanded = (13 - 10) / 10 = 30%

Price elasticity of demand = 30% / -16.7%

= -1.8

Price elasticity of demand is greater than the number 1 so this is elastic.

We value your presence here. Keep sharing knowledge and helping others find the answers they need. This community is the perfect place to learn together. Thank you for visiting IDNLearn.com. We’re here to provide clear and concise answers, so visit us again soon.