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Elasticity of Demand

Suppose a 10[...

Question

Suppose a 10% increase in the price of textbooks decreases the quantity demanded by 20%. The elasticity of demand for textbooks is _____.

[1 mark]

A

(-)0.2

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B

5

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C

10

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D

(-)2

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Solution

The correct option is D (-)2
Ed = Percentage change in quantity
demanded
percentage change in price
Ed = 20
10
Ed = 2

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