Dan sells newspapers. Dan says that a 15 percent increase in the price of a newspaper will...

Question:

Dan sells newspapers.

Dan says that a {eq}15 {/eq} percent increase in the price of a newspaper will decrease the quantity of newspapers demanded by {eq}12 {/eq} percent. According to Dan, the demand for newspapers is _____.

A. perfectly elastic.

B. unit elastic.

C. elastic.

D. inelastic.

The Price Elasticity of Demand:

The price elasticity of demand is a microeconomic concept that measures the responsiveness of the change in the quantity demanded of a product or service when its price changes in the market.

Answer and Explanation: 1

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  • The correct option is D. Inelastic.

It is given that a 15% increase in the price causes a 12% decline in the quantity/number of newspapers demanded....

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Price Elasticity of Demand in Microeconomics

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Chapter 2 / Lesson 11
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In microeconomics, the principle of price elasticity of demand is important to understand. Learn the definition of price elasticity of demand, understand the formula and its categories, and see some calculation examples.


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