ithardin3914 ithardin3914
  • 19-06-2018
  • Business
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The price of gold increases by 200%. if the price elasticity of demand for gold is 0.4, what will happen in the market?

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jamuuj jamuuj
  • 28-06-2018
I believe the answer will be that, the Gold sales will decrease by 80%. (200 × 0.4)
Price elasticity is a measure of the change in the quantity demanded or purchased of a product in relation to its price change. It is the percentage change in the quantity demanded of a good or a service divided by the percentage change in the price. 
That is; Price elasticity of demand = % change in quantity/% change in price
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