The price of a slice of cheesecake increased from $4 to $5. The price elasticity of demand for cheesecake is 2 in absolute value. What will be the percentage change in quantity demanded of cheesecake as a result of this price change. A.Decrease by 12.5% B.Increase by 12.5% C.Decrease by 40% D.Increase by 40% E.Decrease by 50% F.Increase by 50%

Price elasticity of demand is given by Ed = -percentage change in quantity demandedpercentage change…

Answered: The price of a slice of cheesecake…

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter3: Market Demand And Supply

Section: Chapter Questions

Problem 7SQ

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The price of a slice of cheesecake increased from $4 to $5. The price elasticity of demand for cheesecake is 2 in absolute value. What will be the percentage change in quantity demanded of cheesecake as a result of this price change.

A.

Decrease by 12.5%

B.

Increase by 12.5%

C.

Decrease by 40%

D.

Increase by 40%

E.

Decrease by 50%

F.

Increase by 50%

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