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25 October, 15:34

Jack owns a pumpkin patch and has been selling pumpkins for $10. As Halloween approaches, he worries about having too many unsold pumpkins, so he lowers the price by 20%. If the price elasticity for pumpkins is 1.5, how many more pumpkins will Jack sell?

a) 25% more

b) 10% more

c) 30% more

d) 13.3% more

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Answers (1)
  1. 25 October, 18:27
    0
    C

    Explanation:

    Here, we are to calculate how many more pumpkins to be sold by Jack.

    we proceed as follows;

    Price elasticity of demand = percentage change in demand/percentage change in price

    Percentage change in price = 20%

    Let percentage change in demand be D

    So, D/20=1.5

    D = 20X1.5 = 30

    Therefore Option (C) 30% more
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