9.
In this case, we know that
= 4, meaning that %
Q
= -4
x
%
P
or that any change in price leads to a change in quantity 4 times greater, in percentage terms, and in the opposite direction. Therefore, a 1% increase in price will lead to a 4% decrease in quantity demanded.
Copyright
©
1995-2004
OnLineTexts.com
, Inc. - All Rights Reserved
= 4, meaning that %
Q = -4 x %P or that any change in price leads to a change in quantity 4 times
greater, in percentage terms, and in the opposite direction. Therefore,
a 1% increase in price will lead to a 4% decrease in quantity
demanded.
