Question

supposing the initial price of ice cream is 4 per cup and the initial demand for the ice cream is 1 cup only . if the price of ice cream falls to 2 per cup , demand increases to 4 cups. find the elasticity of demand using percentage method​

Answer 1

Answer:

P= 4

∆P=2

Q=1

∆Q=3

therefore, by proportionate method,

elasticity of demand=∆Q/∆P×P/Q

=1/2×4/3

=4/6 =2/3

=0.66

Explanation:

P= initial price

∆P= change in price

Q=initial quantity demanded

∆Q= change in quantity demanded

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