the price of commodity rose by 20 percent as a result of which its demand declined from 20 units to 15 units . calculate its price elasticity o demand
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The price elasticity of demand is calculated as the percentage change in quantity demanded (110 - 100 / 100 = 10%) divided by a percentage change in price ($2 - $1.50 / $2). The price elasticity of demand, in this case, is 0.4. Since the result is less than 1, it is inelastic.
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