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If the demand for a product increases by 10% and the price increases by 5%, what

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Question: If the demand for a product increases by 10% and the price increases by 5%, what is the price elasticity of demand?

Options:

  1. 0.5
  2. 2
  3. 1.5
  4. 1

Correct Answer: 0.5

Solution: 

Price elasticity of demand = % change in quantity demanded / % change in price = 10% / 5% = 2

If the demand for a product increases by 10% and the price increases by 5%, what

Practice Questions

Q1
If the demand for a product increases by 10% and the price increases by 5%, what is the price elasticity of demand?
  1. 0.5
  2. 2
  3. 1.5
  4. 1

Questions & Step-by-Step Solutions

If the demand for a product increases by 10% and the price increases by 5%, what is the price elasticity of demand?
  • Price Elasticity of Demand – Price elasticity of demand measures how much the quantity demanded of a good responds to a change in the price of that good.
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