Question

the demand for a good doubles due to a 25% fall in its price. calculate its price elasticity of demand.​

Answer 1

Answer:

Let the original demand = x

Let new demand = 2x

therefore, change in quantity demanded = x

percentage change in price = 25

price elasticity of demand = % change in qty demanded / % change in price

= x/2x * 100 / 25

= 50/25

= 2

therefore , the price elasticity of demand is 2

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