If the price of Pepsi-Cola increases from 40 cents to 50 cents per can and the quantity demanded decreases from 100 cans to 50 cans, then the value of the price elasticity of demand for Pepsi-Cola is:
If the price of Pepsi-Cola increases from 40 cents to 50 cents per can and the quantity demanded decreases from 100 cans to 50 cans, then the value of the price elasticity of demand for Pepsi-Cola is:
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 13PAE
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Step 1
Introduction
Price elasticity describes how a good's supply or demand fluctuates as a result of fluctuating prices. In other words, it evaluates how consumers respond to a change in an item's price.
Price elasticity of demand describes how variations in price impact the amount of a good that is demanded. On the other hand, price elasticity of supply describes how variations in price impact the amount of a good that is supplied.
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