Question

The prices and quantities demanded of a commodity are given below. On this basis,
find out the price elasticity of demand.
Price (Rs.)
10
20
Demand (units)
20
15​

Answer 1

Answer:

price elasticity= percentage change in quantity/ percentage change in demand

So, 10/5

price elasticity= 2

Answer 2

Answer:

The price elasticity of demand is 0.25

Explanation:

Price elasticity of demand is the percentage change in demand due to percentage change in price. It show how much change in demand occur in respect to change in price.

According to the question, the price and quantity demanded are given below.

              Old price = 10            old demand = 20

           New price = 20            New demand = 15

Price elasticity of demand = % change in quantity demanded /% change in price

% change in quantity demanded = change in demand/ old demand × 100

                                                       =   5 / 20 × 100 = 25%

 % change in price = change in price/ old price × 100

                                = 10 / 10 × 100 = 100%

Price elasticity of demand  = 25/100 = 0.25

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