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?
The percentage change in price is 2.5/18.75 = .1333 . The percentage change in quantity is .1333 × 1.55 = .2067 . In percentages, the change is 20.67 percent.
Economics
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