Question

A consumer buys a certain quantity of a good at a price of ₹10 per unit . When price falls to ₹8 per unit , she buys 40% more quantity . calculate price elasticity of demand.

Answer 1

"Price elasticity of demand = Percentage change in quantity demanded

Percentage change in price

Now, the percentage change in price = change in price ÷ initial price * 100

= -2 ÷ 8 * 100 = 25%

Now in the above formulae = 40% ÷ 25%

= 1.6

Therefore the price elasticity of demand is 1.6.

"

Answer 2

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HERE IS UR ANSWER

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A consumer buys a certain quantity of a good at a price of ₹10 per unit .

When price falls to ₹8 per unit

she buys 40% more quantity

Price elasticity of demand is 1.6