Question

The price elasticity of demand for a popular sporting event is 1.5. If the price of a ticket to this event increases by 10%, the quantity of tickets demanded will decrease by

Answer 1

Answer: Quantity demanded will decrease by 15%

Step-by-step explanation:

The price elasticity of demand shows how much the quantity demanded of a good or service will change in response to a change in the price of the good.

Price elasticity of demand = Percentage change in quantity / Percentage change in price

1.5 = % change in quantity demanded / 10%

% change in quantity demanded = 1.5 * 10%

% change in quantity demanded = 15%

Quantity demanded will decrease by 15%