A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is _____.
[1 mark]
A
(-)0.5
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B
(-)20
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C
(-)2
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D
(-)10
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Solution
The correct option is A (-)0.5 Ed = Percentage change in quantity demanded/percentage change in price
Ed = 10/(-)20
Ed = (-)0.5