Question

The price of a commodity rises from 10 to 12 rupees leading to a fall in demand from 40 units to 30 units . Calculate price elasticity of demand

Answer 1

Answer:

Initial Price (P0) = Rs 10

Final Price (P1) = Rs 12

Percentage change in quantity demanded = -20 %

Change in Demand 30  

Hence, demand falls by 30% when price rises from Rs 10 to Rs 13 per unit.