Question

The price of a commodity rises from rs. 10 to rs. 12 per unit. As a result its demand fall from 120 units to 100 units. Find out price elasticity of demand.​

Answer 1

Answer:

P ed=0.83

Explanation:

p 10 q 120

p1 12 q1 100

thus

delta(p)= 2 and delta(q) = 20

thus

p ed= p/q × delta(q)/delta(p)

p ed= 10/120 × -20/2

thus p ed= -0.83

but p ed= |p ed|

thus p ed= 0.83.

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