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Price elasticity of demand of good A is 1.20. If we increase a price by 15% what will happen to quantity demanded of good A?

My answer is 18% increase since % change in Q = 1.20 * %change P Is this a correct reasoning ?

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  • $\begingroup$ yes, that's correct. $\endgroup$ – E. Sommer Feb 14 at 15:05

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