Increase the quantity demanded by about 25 percent.
What is the short definition of price elasticity?
Price elasticity in business and economics refers to how much people, consumers, or producers alter their demand or the quantity supplied in reaction to changes in price or income.
It is mostly used to evaluate how consumer demand has changed as a result of a price change for a good or service.
What are some examples of price elasticity of demand?
When a price increase results in a greater percentage reduction in demand, we say a good is price elastic.
For instance, if price increases 20% and demand declines 50%, the PED equals -2.5. One illustration is Heinz soup. Heinz soup options are plenty today.
