If the price elasticity of demand for used cars priced between $4,000 and $6,000 is -0.75 (using the mid-point method), what will be the percent change in quantity demanded when the price of a used car falls from $6,000 to $4,000? Instructions: Round your answer to the nearest whole number (percentage).
The formula for Price elasticity of demand is shown below.
Now, let’s first calculate %change in price.
Given price elasticity of demand is -0.75. Substitute the values in the formula of Price elasticity of demand.
Answer: The percent change in quantity demanded is 30.