CFA Level 1
Economics

Calculating Price Elasticity of Demand

Very Easy Microeconomics Elasticity

In the study of microeconomics, elasticity refers to the responsiveness of quantity demanded or quantity supplied to a change in price. If the price of a product increases by 10% and, as a result, the quantity demanded decreases by 20%, what is the price elasticity of demand for this product? Recall that price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price.

Hint

Submitted2.2K
Correct2.1K
% Correct96%