Question

as a result 5% fall in price of a good, its demand rises by 12%. Find the price elasticity of demand​

Answer 1

Answer:

Elasticity of demand = % change in quantity demanded/ % change in price

elasticity of demand = 12% /5%

elasticity of demand = 0.024......

Answer 2

The elasticity of demand = % change in quantity / % change in price  

% change in quantity is = 12%

% change in Price = 5%

Thus, elasticity of demand = 12 / 5 = 2.4

The elasticity of demand is 2.4 this comes after dividing the percentage in quantity with the percentage change in price. So, it is given in the question that the percentage change in quantity is 12% and the percentage change in price is 5%. Thus elasticity is 2.4.