Question

Example 1. When price is 10 per unit, demand for a commodity is 100 units. As the price falls
to 8 per unit, demand expands to 150 units. Calculate elasticity of demand.
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Answer 1

Answer:

elasticity of demand=2.5

Explanation:

price per unit=10

price after falling=8

difference=2

percentage(1) =(2/10)*100=20

demand=100

demand after falling=150

difference=50

percentage(2)=(50/100)*100=50

elasticity=percentage(2)/percentage(1)

=50/20

=2.5

Answer 2

Answer:

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