If Ed=2 and price decreases by 1%, by what percentage and in what direction will quantity demanded change?

Given:

Elasticity of Demand = 2

Decrease in price = 1%

To find:

Change in quantity demanded

Solution:

The percentage change in quantity demanded is the mathematical product of the percentage change in price and elasticity of demand. This can be mathematically represented as,

Since, there is a decrease in price, the demand for the product will increase. Therefore, we can conclude that there will be 2% increase in quantity demanded

​participate in networking opportunities that allow you to get to know potential clients, other entrepreneurs, influential people in your community, etc. focus on doing everything you can to cultivate posting word of mouth advertisin

answermarginal cost;