Question

The demand for a commodity falls by 40 % due to rise in its price by 20%. Calculate Price Elasticity of demand.​

Answer 1

Explanation:

percentage change in demand = ΔQQ×100=−30150x100=−20%ΔQQ×100=-30150x100=-20%

Price Elasticity of demand (Ed)= Percentage change in Quantity demandedpercantage change in price=−20%25%(Ed)= Percentage change in Quantity demandedpercantage change in price=-20%25%

Price Elasticity of Demand (Ed)=(−)0.8(Ed)=(-)0.8