Question

calculate price elasticity of demand for a commodity when its price rises by 20% and quantity demanded falls from 125 units to 75 units​

Answer 1

$\bf\underline{Given :-}$

% change in price = (+) 20%

Quantity demanded (Q) = 125

New quantity demanded (Q1) = 75

Change in qty demanded (ΔQ) = Q1 - Q

75 - 125 = $\boxed {-50}$

Elasticity of demand (Ed) = ?

________________________ _ _

% change in quantity demanded =

ΔQ/ Q ×100

-50/125 ×100 = $\boxed{-40}$

$ed \:( - ) = \frac{\% \: change \:in \: qty \: demanded}{\% \: change \: in \: price} \\ \\ ed \: ( - ) = \frac{ - 40\%}{20\%} = 2$

$\boxed {Ed = 2}$ $\bf\green {(Answer)}$