Question

The price of milk at the local grocery store is cut by 15%. In response to the price cut, the quantity of milk demanded falls by 5%. The absolute value of the price elasticity of demand for milk is _____, and the price elasticity of demand is

Answer 1

Answer:

the absolute value is -0.33 and it is inelastic

Explanation:

The computation is shown below:

The Absolute value of Price Elasticity of Demand (PED) is

= Percentage Change in Quantity Demanded ÷ Percentage Change in Price

= 0.05 ÷ (-0.15)

= -0.33

Since the price elasticity of demand is less than one so here there is an inelastic demand

Therefore the absolute value is -0.33 and it is inelastic

Answer 2

The absolute value is -0.33 and the price elasticity of demand is inelastic .

"Price Elasticity of Demand"

• Price elasticity of demand  is the proportion of the rate alter in amount requested of a item to the rate alter in cost.
• Financial analysts utilize it to get it how supply and request alter when a product's cost changes.

Formula :

• Absolute value of Price Elasticity of Demand (PED) = Percentage Change in Quantity Demanded ÷ Percentage Change in Price
• Absolute value of Price Elasticity of Demand (PED)= 0.05 ÷ (-0.15)
• Absolute value of Price Elasticity of Demand (PED)= -0.33

Therefore , the price elasticity of demand is less than one so here there is an inelastic demand.

So, the absolute value is -0.33 and it is inelastic demand.

Learn more about "Demand":

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