If a 12% fall in price of burger leads to a 3% increase in the quantity demanded of burgers then the price elasticity would be
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Answered by
3
Solution :-
% change in Demand = 3 %
% change in Price = - 12 %
Price Elasticity of Demand (ED)
= % Change in Quantity Demanded/% Change in Price
⇒ 3 %/- 12 %
= 1/4
= 0.25
Price Elasticity of Demand is 0.25, which is inelastic.
It will not be shown with a negative sign. Here is the clarification for this.
It is important to note that when the price of burger decreases by 1 %, the quantity demanded will be changed by 0.25 %. It means the change in the price will result in a smaller percentage change in the quantity of burger. So, it is not shown with a negative sign.
% change in Demand = 3 %
% change in Price = - 12 %
Price Elasticity of Demand (ED)
= % Change in Quantity Demanded/% Change in Price
⇒ 3 %/- 12 %
= 1/4
= 0.25
Price Elasticity of Demand is 0.25, which is inelastic.
It will not be shown with a negative sign. Here is the clarification for this.
It is important to note that when the price of burger decreases by 1 %, the quantity demanded will be changed by 0.25 %. It means the change in the price will result in a smaller percentage change in the quantity of burger. So, it is not shown with a negative sign.
Answered by
1
Answer:
It will be - 0.25
Step-by-step explanation:
3%/12%
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