The price of milk at the local grocery store is cut by 10%. The quantity of milk demanded increases by 5% in response to this price cut. What is the absolute value of the price elasticity of demand for milk?

The price of milk at the local grocery store is cut by 10%. The quantity of milk demanded increases by 5% in response to this price cut. What is the absolute value of the price elasticity of demand for milk?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 24SQ: Suppose that when price is 10, quantity supplied is 20 units, and when the price is 6, the quantity...

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Question

For this question, would the answer be 0.5?

The price of milk at the local grocery store is cut by 10%. The quantity of milk demanded increases by
5% in response to this price cut. What is the absolute value of the price elasticity of demand for milk?
02
O-2
O 0.5
O-0.5

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