Question

commodities A elasticity of demand is twice the elasticity of demand of B. tje demand for A rises from 100 to 150 units due to 20 % fall in its price. calculate the percentage change in the quantity demanded of B when its price rises by 8%
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Answer 1

Answer:

The price elasticity of demand is calculated as the percentage change in quantity demanded (110 - 100 / 100 = 10%) divided by a percentage change in price ($2 - $1.50 / $2). The price elasticity of demand, in this case, is 0.4. Since the result is less than 1, it is inelastic.