Price reduce the quantity demanded


Suppose that 50 units of a good are demanded at a price of $1 per unit. A reduction in price to $.20 results in an increase in quantity demanded to 70 units. Show that these data yieled a price elasticity of .25. By what percentage would a 10% rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve.

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Microeconomics: Price reduce the quantity demanded
Reference No:- TGS064012

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