Answer:
option (a) 2.5
Explanation:
Given:
Price cuts of dolls = 10 percent
Quantity of the dolls sold increases = 25 percent
Now,
Price elasticity of demand for dolls = [tex]\frac{\textup{Percentage change in Quantity sold}}{\textup{Percentage change in Price}}[/tex]
on substituting the respective values, we get
Price elasticity of demand for dolls = [tex]\frac25}{10}[/tex]
or
Price elasticity of demand for dolls = 2.5
Hence, the correct answer is option (a) 2.5
