Question

The price elasticity of demand for imported whiskey is estimated to be -.20 over a wide interval of prices. The federal government decides to raise the import tariff on foreign whiskey, causing its price to rise by 20 percent. Will sales of whiskey rise or fall, and by what percentage amount?

Answer 1

Price elasticity is (%change-Q)/(%change-P)

So, simply plug in what what you have in the formula.
(%change-Q) / 20 = -.2 -- solve for %change-Q

Answer 2

fall by 4%