The price of pizza falls by 25 percent. If the elasticity of demand for pizza is equal to –1.5, what will happen to the quantity of pizza demanded?
What will be an ideal response?
[percentage change in quantity demanded]/[-25] = -1.5 . If the price of pizza falls by 25 percent, the quantity of pizza demanded will rise by 37.5 percent.
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Answer the following statement true (T) or false (F)
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