Suppose the price elasticity of demand for a certain pharmaceutical drug is 0.1. In order to...
Suppose the price elasticity of demand for a certain pharmaceutical drug is 0.1. In order to lower the price of the drug by 20 percent, the quantity of the drug must be increased by: (the answer is expressed as a percent, so just write the value of the percent. You don't need to put a % after your answer)
Homework Answers
Price elasticity of demand = %age change in quantity / % change in price
Price elasticity of demand = 0.1
% change in price = 20%
%age change in quantity = 20% * 0.1 = 2%
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