Answer to Question #181046 in Microeconomics for HISHPAPI✈️

Question

The own price elasticity of the market demand for cigarette is -0.4% if the price falls by 5%, by what percentage will be quantity?

Answer 1

Price elasticity demand =%change in Q.D÷% change in price=-0.4

%change in price=5%

% change in Q.D=?

Therefore: % change in Q.D=Price elasticity demand×%change in price

% change in Q.D=-0.4×5

=-2.0%