The price elasticity of demand for smartphones is believed to be -2.0 . A manufacturer decides to cut prices by $$\(10 \%\)$$. What will be the effect of this change in price?
A.
demand will fall by \(20 \%\)
B.
demand will rise by \(5 \%\)
C.
quantity supplied will remain unchanged
D.
revenue will increase
Exam No：0455_m25_qp_12 Year：2025 Question No：7
Answer:
D
Knowledge points:
2.7.1 definition of PED
2.7.2 Calculation of PED using the formula and interpreting the significance of the result.
2.7.3 determinants of PED (The key influences on whether demand is elastic or inelastic.)
2.7.4 PED and total spending on a product/revenue (both in a diagram and as a calculation.)
2.7.5 significance of PED (The implications for decision making by consumers, producers and government.)
Solution:
Download APP for more features
1. Tons of answers.
2. Smarter Al tools enhance your learning journey.
IOS
Download
Download
Android
Download
Download
Google Play
Download
Download