Final answer:
A 20 percent increase in the price of beef will cause the quantity of beef demanded to decrease by approximately 12 percent, given the price elasticity of demand for beef of 0.60.
Step-by-step explanation:
The price elasticity of demand measures how responsive the quantity demanded of a good is to a change in price. In this case, a price elasticity of demand for beef of 0.60 suggests that beef is relatively inelastic. When the price of beef increases by 20 percent, we can expect the quantity demanded to decrease by approximately 12 percent.
The price elasticity of demand for beef is about 0.60, indicating how responsive the quantity demanded of beef is to a change in price. When the price of beef increases by 20 percent, to calculate the expected change in quantity demanded, we can use the formula: percentage change in quantity demanded = price elasticity of demand × percentage change in price. Therefore, with a 0.60 elasticity and a 20 percent increase in price, the expected change in quantity demanded is 0.60 × (-20%) = -12 percent. This shows that the quantity of beef demanded will decrease by approximately 12 percent.