The demand for a good falls to 240 units in response to rise in price by Rs 2. If the original demand was 300 units at the prices of Rs 20. Calculate price elasticity of demand.
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Answered by
37
original demand = 300
new demand = 240
change in demand = -60
original price = 20
new price = 22
change in price = 2
elasticity of demand=change in demand / change in price*price/demand
= -60 /2 * 20/300
= -30 * 1/15
= -2
Answered by
4
Answer:
original demand = 300
change in demand = -60
new price = 22
new demand = 240
original price = 20
change in price = 2
ELASTICITY OF DEMAND = CHANGE IN DEMAND / CHANGE IN PRICE × PRICE / DEMAND
= -60/2×20/300
= -30/15
= -2
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