Between 2016 and 2021, the average price of organic honey in Germany increased from €10.00 per kilo to €12.00 per kilo. Over the same period, the quantity of organic honey purchased fell from 50 million kilos to 42 million kilos.
Assume that the change in the quantity of organic honey purchased was only caused by the change in the price of organic honey. Calculate the price elasticity of demand for organic honey in response to the rise in its price. You are advised to show your working.
