Question

As price of commodity increases from rs4 per unit to rs5 per unit demand falls from 20units to 10units find out the elasticity of demand?

Answer 1

$\huge\blue{Answer}$

Initial cost of commodity (P) = rs 4

Final cost of commodity (P1) = rs 5

Initial demand (Q) = 20 units

Final demand (Q1) = 10 units

We know that

Ed = - P/ Q × ∆Q/∆P

∆Q = P1 - P

∆ Q= 10 - 20

∆ Q= -10

∆ P= Q1-Q

∆ P = 5-4

∆P = 1

$ed = - \frac{4}{20} \times - \frac{10}{1}$

Ed = 2

hope it helps