Question

Jack owns a pumpkin patch and has been selling pumpkins for $10. As Halloween approaches, he worries about having too many unsold pumpkins, so he lowers the price by 20%. If the price elasticity for pumpkins is 1.5, how many more pumpkins will Jack sell?

a) 25% more
b) 10% more
c) 30% more
d) 13.3% more

Answer 1

C

Step-by-step explanation:

Here, we are to calculate how many more pumpkins to be sold by Jack.

we proceed as follows;

Price elasticity of demand = percentage change in demand/percentage change in price

Percentage change in price = 20%

Let percentage change in demand be D

So, D/20=1.5

D = 20X1.5 = 30

Therefore Option(C)30% more