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Price elasticity of demand for housing

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Reference no: EM132471665

For this question, assume economists have determined that the price elasticity of demand for housing in a given range of the demand curve is -1.75. Suppose that the price of housing increases by 10 percent.

  • Given the value of price elasticity of demand, is demand for housing elastic or inelastic in the given range of the demand curve?
  • What happens to quantity demanded of housing (what is the percentage change in the quantity demanded of housing) as price of housing increases by 10%?
  • As price of housing increases by 10%, does total expenditure (spending) on housing increase or decrease? Please explain your answers.

Answer this question with a narrative response in the text box provided (no graph needed).

Reference no: EM132471665

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