Question

What is price elasticity and how can we use that concept as a shopkeeper???

Answer 1

Answer:

✌✌Price Elasticity = (-25%) / (50%) = -0.50✌✌✔✔

That means that it follows the law of demand; as price increases quantity demanded decreases. As gas price goes up, the quantity of gas demanded will go down. Price elasticity that is positive is uncommon. An example of a good with positive price elasticity is caviar.

Answer 2

Answer:

Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. It is computed as the percentage change in quantity demanded—or supplied—divided by the percentage change in price.