Answer to Question #73909 in Microeconomics for Scelo

Question

Explain the price elasticity of demand of -0.12 for consumer product?

Answer 1

Price elasticity of demand is a measure of the change in the quantity demanded or purchased of a product in relation to its price change. Expressed mathematically, it is:

Price Elasticity of Demand = % Change in Quantity Demanded / % Change in Price

When the price elasticity of demand is -0.12 it means that:
If price for consumer product is increase on 1%, the Quantity of Demanded consumer product will decrease by 0.12%.
We can conclude that demand for this consumer product is inelastic and this daily use
good.