Question

PROPORTIONATE METHOD
82. If the demand for a product reduces by 5% as a result
of an increase in the price by 25%. What is the price
Elasticity of Demand?
(a) - 0.2
(b) -0.5
(C) -0.25
(d) 0.2
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Answer 1

The elasticity of demand of a product is the % change in quality demanded ÷% change in price, hence 5÷25

C) -0.25