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Luda [366]
2 years ago
15

If the elasticity of demand for a microwave oven is 1.5, this means....

Social Studies
1 answer:
Korvikt [17]2 years ago
6 0

Answer:

C. a 5% decrease in price will lead to a 7.5% increase in quantity demanded

Explanation:

We find the answer by usin the price elasticity of demand formula

Price elasticity = %change in quantity demanded/% in price

Now, we plug the correct amounts into the formula

1.5 = 7.5% / 5 %

So we can see that the correct answer is C because the division of 7.5 by 5, gives us a result of 1.5.

An elasticity of 1.5 means that the good is relatively elastic: this means that the quantity demanded will change more than the price. We can see that this is true for this example: the quantity demanded changed by 7.5%, while the price changed by 5%.

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Explanation:

Hope this helps

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