5.2) A consumer spends R2000 monthly on Product A when its price is R2 and continues to spend R2000 monthly when its price increases to R2.50. Calculate the consumer’s price elasticity of demand. Show all your workings and explain your answer.

5.2) A consumer spends R2000 monthly on Product A when its price is R2 and continues to spend R2000 monthly when its price increases to R2.50. Calculate the consumer’s price elasticity of demand. Show all your workings and explain your answer.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 2.4P

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5.2) A consumer spends R2000 monthly on Product A when its price is R2 and continues to spend R2000 monthly when its price increases to R2.50. Calculate the consumer’s price elasticity of demand. Show all your workings and explain your answer.

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