Question

A certain quantity of the commodity is purchased when its price is rs 10 per unit . Quantity demanded increases by 50 per cent in response to a fall in price by rs 2 per unit . Find elasticity of demand.

Give explanation also.​

Answer 1

Answer:

-0.625%

Explanation:Price elasticity of demand=(∆% in Quantity Demanded)/(∆% in Price)

∆% in Quantity demanded=50%

∆% in Price= ( (2–10)/10)*100 = -80%

Price elasticity of demand= -50%/80% = -5/8% = -0.625%

When finding the price elasticity of demand we take the modulus of the final product. Therefore, Price elasticity of demand is -0.625%

Answer 2

Answer:

-0.625%

Explanation:

Refer attachment for explanation.

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