Suppose you know that the price elasticity of demand for your product is 0.5, and you are thinking about raising your price by 8%. how much can you expect quantity to decrease? a. 8%b. 5%c. 4%d. we can't tell how much quantity will decrease

Option (c) is correct.

Explanation:

Given that,

Price elasticity of demand = 0.5

Percentage increase in price = 8%

Price elasticity of demand =

0.5 =  

Percentage change in quantity demanded = 0.5 × 8

                                                                       = 4%

Therefore, if the price rises by 8% then as a result quantity demanded decreases by 4%.

answermarket demand;

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.