**Question 13**If the price elasticity of demand for a product is equal to 0.4, then a decrease in price of 8 percent will increase quantity demanded by:**Multiple Choice:**- ○ 20 percent.- ○ 0.32 percent.- ○ 3.2 percent.- ○ 0.05 percent.**Explanation**This question is about understanding the concept of price elasticity of demand. Price elasticity of demand measures how much the quantity demanded of a good responds to a change in price. It is calculated as:\[ \text{Percentage Change in Quantity Demanded} = \text{Price Elasticity of Demand} \times \text{Percentage Change in Price} \]Given:- Price Elasticity of Demand = 0.4- Decrease in Price = 8 percentThe calculation would be:\[ 0.4 \times 8\% = 3.2\% \]Therefore, the correct answer is: **3.2 percent.**

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Answered: If the price elasticity of demand for a…

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Comment on the Elasticity of demand for a good having high number of substitutes
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If the price elasticity of demand for a product is equal to 0.4, then a decrease in price of 8 percent will increase quantity demanded by 3. Multiple Choice -Вook 20 percent. 0.32 percent. 3.2 percent. 0.05 percent.