Answer :
Answer:
A) 3% decrease in the quantity demanded of pineapple.
Explanation:
We know that the demand curve is negative, which means that as price of a product increases, its demand will decrease.
In unitary elasticity(1) the change in demand means that the change in quantity demanded will be the same. A 0.75 elasticity will thus mean that the quantity demanded will change by a factor of 0.75 as compared to the change in price.
Therefore when the price of pineapple increases by 4%, the quantity demanded will decrease by 4 * 0.75 = 3%
Answer:
The correct option is A: 3% decrease in the quantity demanded of pineapple.
Explanation:
The price elasticity of demand can be calculated by checking the percentage change in the quantity of a product demanded by consumers and divided by the percentage change in the price of the product. Hence, if the price elasticity is 0.75, this means that 0.75*4 = 3
Hence there will be a 3% decrease in the quantity demanded, because as price increases, the quantity demanded decreases when talking about price elasticity of demand.