1. (calculating Price Elasticity of Demand) Suppose that 50 units of a good and demanded at a price of $ 1 per units. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Show that these data yield a price elasticity of 0.25. By what percentage would a 10 present rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?
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