Question

Find arc elasticity of demand, if quantity demanded falls from 4600 to 4200 when price of the item is increased from Rs 960 to Rs 1000?

Answer 1

If the quantity demanded falls from 4600 to 4200, the price of the item is increased from 960 to 1000 means the quantity demand is increased and the price of the item will come down.

The quantity demand is decreased means the price of the item will increase.

Because when the demand is increase means the item will easily move but when the demand is decreasing means that an item will move slowly that is the reason for quantity demand decrease then item price will increase.