Question

Walmart is thinking about offering a 25% discount on a brand of shoes. If the elasticity of demand is two, then the discount would increase sales by

Answer 1

Elasticity of demand is a measurement used in economics to show how people respond and demand a product or service when nothing but the price changes.

If Walmart were to discount a shoe by 25% and the demand of the shoes is two pair, sales would increase by 50%. People are purchasing two pairs at this price and receiving 25% off of each pair.