How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Scott Your Own Question
Scott, MIT Graduate
Category: General
Satisfied Customers: 17710
Experience:  MIT Graduate, United States Traveler, Information Finder
Type Your Question Here...
Scott is online now
A new question is answered every 9 seconds

Patrick McCarthy estimated the price elasticity of demand ...

Resolved Question:

Patrick McCarthy estimated the price elasticity of demand for new cars to be 0.87. If the price of cars declined by 40%, one would expect the quantity of new cars demanded to:
a. fall 45.8%
b. rise 45.8%
c. fall 34.8%
d. rise 34.8%
Submitted: 10 years ago.
Category: General
Expert:  Scott replied 10 years ago.

Hi, and welcome back!

The formula is:

ED = %changequant/%changeprice

Plug in ED = 0.87 and %changeprice = 40

0.87 = %changequant/40

Multiply by 40:

%changequant = 34.8

The demand will rise by 34.8%. (Which makes sense, since the price goes down, more people will want to buy.)

Let me know if you have any questions,


Scott and 16 other General Specialists are ready to help you