Answer to Question #160036 in Microeconomics for syeda zarah

Question

If a 10% decrease in the price of one product that you buy causes an 8% increase in quantity demanded of that product, will another 10% decrease in the price cause another 8% increase (no more and no less) in quantity demanded?

Answer 1

It's unlikely to be true since demand elasticity increases as price drop and quantity increase, the second 10% decrease in price would be expected to be met with a larger than 8% increase in quantity.