Question

Price of the commodity Rises from Rs 5 to Rs 6. As a result, its demand Falls from 100 units to 80

units. Find out price elasticity of demand. Comment whether the demand is elastic or inelastic.​

Answer 1

Answer:

∆Q = change in quantity = 20

∆P = Change in price = 1

P = original price = 5

Q = original quantity = 100

price elasticity of demand = ∆Q× P

∆P × Q

= 20 × 5 = 20 × 0.05 = 1

1 × 100

Pe = 1

The price elasticity if demand is Unit elastic

ie, A percentage change in quantity demanded is equal to the percentage change in price. Therefore the elasticity of demand is 1.

Explanation:

Hope you got an understanding. please mark me as brainliest. Thankyou.