price of item x rises from ₹20 to ₹30 per unit . consequently its demand falls by₹10 unit and become 100 unit . determine price elasticity of demand
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Answer:
iven, P=Rs.20; P
1
=Rs.23;
△P=P
1
−P=Rs.23−Rs.20=Rs.3
Percentage change in price =
P
△P
×100=
20
3
×=15 per cent
Percentage change in quantity demanded =(−)30 per cent
Price elasticity of demand (E
d
)=(−)
Percentagechangeinprice
Percentagechangein quantitydemanded
=(−)
15%
−30%
= 2
Price elasticty of demand =2.
Explanation:
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