Question

How Price Elasticity is calculated ? Don't copy answer from internet

Answer 1

Answer:

Here's your answer in my words.

Explanation:

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.

Answer 2

Answer:

Price Elasticity is calculated by different methods

• Percentage Method

• Arc Method

• Point Method

Percentage Method :-

Percentage Method is also called as Proportionate Method. In this method, Price Elasticity of demand is measured by the ratio of percentage change in the quantity demanded to a percentage change in the price elasticity of the commodity.

It's Formula is :-

$Ep \: = \frac{\% \: change \: in \: quantity \: demanded}{\% \: change \: in \: price}$

Arc Method :-

When Elasticity of demand is measured over a finite range or 'arc' of a demand curve, it is called as Arc elasticity of demand.

Point Method :-

Point Method is also called as Geometric Method. When the price elasticity of demand is measured at a particular point on a demand curve, it is called point elasticity.

It's Formula is :-

$Ep \: = \frac{line \: segment \: <strong>below</strong> \: the \: point \: on \: the \: demand \: curve }{line \: segment \: <strong>above</strong> \: the \: point \: on \: the \: demand \: curve}$

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