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Homework answers / question archive / If the quantity demanded of the meat pies decreases by 3% when the price of the meat pie falls by 10%, what is the price elasticity of demand for meat pies?

If the quantity demanded of the meat pies decreases by 3% when the price of the meat pie falls by 10%, what is the price elasticity of demand for meat pies?

Economics

If the quantity demanded of the meat pies decreases by 3% when the price of the meat pie falls by 10%, what is the price elasticity of demand for meat pies?

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Price elasticity of demand (PED) = %change in quantity demanded/%change in price

But;

%change in quantity demanded = 3% (when calculating PED will be -3 because the demand decreased)

%change in price = 10%

Hence, PED = -3/10 = -0.3

Price elasticity of demand for meat pies = -0.3