Question

Price elasticity of demand is 2. Calculate the percentage change in its price that will result in 40% rise in its demand​

Answer 1

Answer:

80

Explanation:

price elasticity of demand = percentage change in quantity demanded÷ percentage change in price

Let the percentage change in price be x%

$2 = \frac{x\%}{40\%} \\ \\ x\% = 2 \times 40\% \\ \\ \frac{x}{100} = \frac{2 \times 40}{100} \\ \\ x = 2 \times 40 \\ x = 80$