Ask Question
21 January, 19:45

Suppose that when the price of a soft drink rises 10%, the quantity demanded of the soft drink falls 5%. Based on this information, what is the approximate absolute price elasticity of demand for soft drink

+1
Answers (1)
  1. 21 January, 19:57
    0
    0.5

    Explanation:

    The price elasticity of demand (PED) measures how a 1% change in the price of a good or service changes the quantity demanded.

    in this case the PED = - 5% / 10% = - 0.5

    PED is usually measured in absolute terms = 0.5, this means that the demand is price inelastic. A change in the price will result in a smaller proportional change in the quantity demanded.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Suppose that when the price of a soft drink rises 10%, the quantity demanded of the soft drink falls 5%. Based on this information, what is ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers