Suppose The Price Of Elasticity Of Demand For Text Books Is Two And The Price Of The Text Book Is Increased By 10%. By How Much Does The Quantity Demand Fall? Inter The Result And Discuss Reasons For The Fall In Quantity Demand?


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The reason demand falls is that people find textbooks less useful relative to other goods and services at the higher price. An example might be a builder needing to figure out some complex geometry for a special roof. At one price for the book, he may feel buying a textbook and studying it for a couple of evenings is the best way to get the information he needs. But at a higher price for the book, he may opt to have subcontractor do the work and spend his time doing something else.

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