Answer to Question #225665 in Microeconomics for Hego

Question

• If an increase in the supply of water bottles leads to a 6 per cent decrease in the price and a 5 per cent increase in the quantity demanded, the price elasticity of demand for water bottles is 
• A. 0,6
•  B. 0,3
•  C. 0,83
•  D. 1,2

Answer 1

$E= \frac {(1.05-1)}{1}: \frac {(0.94-1)}{1};$

$E=0.05:(-0.06); E=- 0.83;$

Answer $=C.$