the demand for a commodity increases from 100 to 200 units and price falls from 12 to 10 find out the price elasticity of demand
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We know that Price elasticity of demand is
(-)Percentage change in quantity demanded
_____________________________________
Percentage change in price
Old Price = Rs 12
New Price = Rs 10
Old Qty = 100
New Qty = 200
Change in Quantity demanded = 200 - 100/100
Change in Price = 10 - 12/12
100/100
(-)--------------
-2/12
= 6
Hence, Price Elasticity of Demand = 6
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