Question

If the price of copy rises from Rs 4 to Rs 5 per unit and demand goes down from 20 to 10 copies,

then what will be the price elasticity of demand ?

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Answer 1

Answer:

Given that- initial price=4

initial demand=20

change in price=5-4=1

change in demand=10-20=-10

we know

ED= -∆Q/∆P × P/Q

ED= - (-10)/1 ×4/20

ED = 2