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9 May, 03:55

If elasticity of demand is 0.5, and the price is lowered from $20 to $19, by what percentage will quantity demanded rise?

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  1. 9 May, 04:16
    0
    To find the percentage of demand rise, the formula is

    Elasticity = (percentage change of demand/percentage change of price)

    Elasticity is equal to 0.5. The percentage change of price is:

    Percentage change of rise = (20-19) / 20 * 100 = 5%

    Then,

    0.5 = Percentage change in demand/5%

    Percentage change in demand = 2.5%
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