Jimmy's peanut farm wants to increase the quantity of peanuts that it sells by 1 percent. the price elasticity of demand for peanuts sold by jimmy's peanut farm is 0.4. what is the percentage price cut that will achieve the firm's objective? the percentage price cut is _ nothing percent.

Jimmy's Peanut Farm has to decrease its prices by 2.5% in order to achieve a 1% increase in the quantity of peanuts it sells.

Jimmy's Peanut Farm can increase the quantity sold by 1% only when the demand for peanuts increases. Demand for peanuts will increase only when the price of peanuts decrease. The Price Elasticity of Demand measures the responsiveness of demand to a percentage change in price.

The formula for Price Elasticity of Demand (PED) is given by the formula:

We have:

Percentage increase in quantity               1%  or 0.01

Price Elasticity of Demand (PED)               0.40

Re-arranging the PED formula above we get,

Substituting the values in the equation above we get,

answer; test-retest;