Question

when price of a goat is 25 the consumer buys 20 unit of that good. when price changes to 27, the quality purchase changes to 12 units calculate price elasticity of demand​

Answer 1

Answer:

original quantity (Q) =20units

original price(P)=25 rupees

new quantity (Q1)=12 units

new prize(P1)=27 rupees

change in quantity(∆Q)= -8 units

change in price(∆P)=2 rupees

By using formula

price elasticity of demand (Ed)=∆Q/∆P×P/Q

=-8/2×25/20=-4×1•25=5