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Answer to Question #244861 in Microeconomics for Hassan
Question #244861
Suppose the price elasticity of demand for Geisha soap is 4. What will be the effect on the quantity demanded for Geisha Soap if price rises by 8%?
Expert's answer
Elasticity of demand =percentage change in quantity demanded /percentage change in price
Elasticity of demand=4
Percentage change in price = 8
4=percentage change in quantity demanded/8
percentage change in quantity demanded=4*8=32
So demand is decreased by 32%.
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