Answer: Percentage change in quantity would decrease by 12.5%.
Step-by-step explanation:
Since we have given that
Price elasticity of demand = -0.8
Price of each unit = $100
After change, price of each unit becomes = $110
% change in quantity would be
[tex]\dfrac{New-old}{old}\times 100=\dfrac{110-100}{100}\times 100=10\%[/tex]
As we know the relation between price, quantity and elasticity.
[tex]e_D=\dfrac{\text{\% change in quantity}}{\text{\%change in price}}\\\\-0.8=\dfrac{10\%}{x}\\\\x=\dfrac{10}{-0.8}\\\\x=-12.5\%[/tex]
Hence, Percentage change in quantity would decrease by 12.5%.
