If the price elasticity of demand for a good is 0.43, an increase in the price of the good will result in____________

  • A a decrease in profit by 43%
  • B an increase in profit by 43%
  • C a net loss
  • D a net gain
jamb 2018economics

The correct answer is A. a decrease in profit by 43%

The price elasticity of demand measures the responsiveness of quantity demanded to changes in price.

A price elasticity of demand of 0.43 means that a 1% increase in price will lead to a 43% decrease in the quantity demanded.

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