Question

what will be the elasticity of demand if there is a decline in price of a good by 10% and increase in demand by 30% ?

Answer 1

Explanation:

Elasticity of demand is as follows

ed = Proportionate change in price

Proportionate change in quantity demand

ed= 10%

30%

ed = 1/3 (i.e) 0.33

since, ed<1

It is relatively inelastic demand