Economics · Oct / Nov 2023 · Paper 12 · Question 8

The owner of a hotel in Malaysia finds that the price elasticity of demand (PED) for accommodation in the area is –1.7. If the hotel owner decreases the price of a room by 5%, how would the demand for a room change?

1. AIt would decrease by 2.9%.
2. BIt would decrease by 8.5%.
3. CIt would increase by 2.9%.
4. DIt would increase by 8.5%.

As printed in the paper