Suppose that elasticity has been reliably measured as 1.55 and the unit price decreases from $20 to $17.50. How much will quantity demanded increase?
What will be an ideal response?
The percentage change in price is 2.5/18.75 = 0.1333. The percentage change in quantity is 0.1333 × 1.55 = 0.2067. In percentages, the change is 20.67 percent.
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a. True b. False Indicate whether the statement is true or false
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