Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
5
B
0
C
0
D
-2.0
Understanding the Answer
Let's break down why this is correct
Answer
Price elasticity of demand measures how much the quantity demanded of a product changes when its price changes. In this case, the price increases by 10%, and the quantity demanded decreases by 5%. To find the price elasticity, we use the formula: percentage change in quantity demanded divided by the percentage change in price. So, we take -5% and divide it by 10%, which gives us -0. 5.
Detailed Explanation
The price elasticity of demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price. Other options are incorrect because This answer suggests that demand doesn't change at all; This option also says demand doesn't change.
Key Concepts
Price elasticity of demand
Topic
Elasticity of Demand
Difficulty
easy level question
Cognitive Level
understand
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