Knowing that the price elasticity of demand is 2 tells us that
any change in price will be met by a percentage change in quantity
twice as large and in the opposite direction. An increase in price
from $5 to $5.50 represents an increase of 10%, thus quantity
demand will fall by 20%. Originally 1000 pairs were sold, 20%
of 1000 is 200 so the new demand will be 200 less or 800.