Question

suppose that originally a product was being sold at rupees 10 per unit and the quantity demanded was 1,000 units the product price changes to rupees 14 and as a result the quantity demanded changes to 500 units. calculate the price elasticity of demand​

Answer 1

Answer:

2.33

Explanation:

When the quantity demanded was 1000 the price was Rs. 10

When the quantity demanded was 500, the price was Rs. 14

% change in the quantity

$=\frac{1000-500}{(1000+500)/2} \times 100$

$=\frac{500}{750}\times 100=\frac{200}{3}$

% change in price

$=\frac{10-14}{(10+14)/2}\times 100$

$=-\frac{4}{14} \times 100$

$=-\frac{200}{7}$

$\text{Price elasticity of demand}=\frac{\text{\% change in Quantity}}{\% \text{change in price}}$

$\implies \text{Price elasticity of demand}=\frac{200/3}{-200/7}=-\frac{7}{3}$

or, Price elasticity of demand = 7/3 = 2.33 (positive)

Answer 2

Answer:

here is your ans .

(-)1.25