Question

If the price declines from$400 to $300 and, as a result, quantity demanded increase from 1100 t0 1400 , elasticity of demand is:

Answer 1

PED is %Change in demand ÷ %Change in price
%Change in demand is 1400-1100/1100
= 300/1100 = 27%
%Change in price is 300-400/400
= 100/400 = 25%
Ped = 27/25 = 1.08