Answer to Question #280626 in Economics of Enterprise for rere

Question

Price increases from $10 to $12 and the price elasticity of demand is -0.5. The quantity demanded is 450 units. What was it before?

Answer 1

$E=\frac{\frac{Q2-Q1}{Q1}}{\frac{P2-P1}{P1}}$

$-0.5=\frac{\frac{450-Q1}{Q1}}{\frac{12-10}{10}}$

Q1=500