Answer:
% change in quantity demanded= 237% or 2.37
Explanation:
Elasticity of demand is defined as the degree of responsiveness of changes in quantity demanded to changes in price of a commodity.
When there is an increase in price demand falls and vice versa. Price and quantity demanded of a product has inverse relationship.
In this scenario to calculate the percentage increase in quantity of cocaine demanded, use the formula
Elasticity= % change in quantity demanded/% change in price
-3= % change in quantity demanded/-79
Cross-multiply
% change in quantity demanded= -3* -79
% change in quantity demanded= 237%
Expressed as a real number it is 2.37
A decrease in price by 79% results in an increase in demand by 237%
