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The price of oysters increases by 14%
The price of oysters increases by 14%. As a result, the quantity demanded declines by 27%. The price elasticity of demand for oysters is
a. -1.929.
b. -0.929.
c. zero.
d. -17.
Expert Solution
Given -
- Increase in price of oysters = 14%
- Decline in quantity demanded = 27%
The formula for price elasticity of demand is as follows -
- Price Elasticity of Demand = Change in Quantity Demanded / Change in Price
- Price Elasticity of Demand = -27 / 14
- Price Elasticity of Demand = -1.929
Therefore,
- Correct answer is Option (A) -1.929
Further, demand for oysters is elastic.
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