Answer:
The quantity would decrease to 60 pounds.
Explanation:
The price of bananas is 50 cents.
The total demand is 100 pounds.
The price elasticity of bananas is -2.
The price elasticity = [tex]\frac{\frac{Q2-Q1}{Q1} }{\frac{P2-P1}{P1} }[/tex]
-2 = [tex]\frac{\frac{Q2-100}{100} }{\frac{60-50}{50} }[/tex]
-2 = [tex]\frac{\frac{Q2-100}{100} }{\frac{10}{50} }[/tex]
[tex]-2 = \frac{\frac{Q2-100}{100} }{0.2}[/tex]
-0.4 = [tex]\frac{Q2-100}{100}[/tex]
-40 = Q2-100
Q2 = 60
