Given that the elasticity of demand for a commodity is 2.5, the percentage change in the quantity demanded as a result of a 10 percent change in it price is...

Answer Details

The elasticity of demand measures the responsiveness of the quantity demanded to changes in price. If the elasticity of demand for a commodity is 2.5, it means that a 1% change in the price of the commodity will result in a 2.5% change in the quantity demanded. Therefore, a 10% change in the price of the commodity will result in a change in the quantity demanded of: 2.5% x 10 = 25% Hence, the percentage change in the quantity demanded as a result of a 10% change in price is 25%. Therefore, the answer is option D, 25.00.