Due to 40 % change in quantity demanded of a commodity there is 15% change in price. Calculate the price elasticity of demand.
Answers
Answered by
0
Answer:
d = (-) 0.8; (Demand is less elastic because Ed<1)
Negative sign of Ed indicates the inverse relationship between price and quantity demanded.
Solution
Percentage change in price = ΔQQ×100=80500x100=16%
Price Elasticity of Demand (Ed)= Percentage change in Quantity demandedpercantage change in price=16%−20%
Price Elasticity of Demand (Ed)=(−)0.8
Explanation:
Similar questions