Question

The demand for a good rises by 20 percent as a result· of fall in its price. Its price elasticity of demand is (-)0.8. Calculate the percentage fall in price.​

Answer 1

Given:-

• The demand for a good rises by 20 percent as a reult.
• It's price elasticity of demand is (-)0.8

To Find:-

• Calculate the percentage fall in price.

Solution:-

$\sf\pink{{e_D = (-)%\frac{Change \: in\:Demand}{Change\:in\:Price}}$

$\sf \: - (0.8) = \frac{20}{percent \: change \: in \: price} \\ \sf \: percent \: change \: in \: price = \frac{20}{( - )0.8} \\ \sf \: = ( - )25 percent$

$\sf\therefor$Percent fall in Price = 25%

Answer 2

Step-by-step explanation:

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