高階ECON-ELAS-009
A firm knows that the price elasticity of demand for its product is -1.5. If the firm cuts the price by 10%, the percentage change in total revenue is approximately:
A. 3.5% increase✓ 答案
B. 5% increase
C. 5% decrease
D. 3.5% decrease
解說
PED = -1.5, so %ΔQd = -1.5 × (-10%) = +15%. New total revenue = (0.9P) × (1.15Q) = 1.035PQ, a 3.5% increase. Option B ignores the cross term (simple sum: -10%+15%=5%), but exact calculation gives 3.5%. C and D have wrong signs or magnitudes.