Question

when price of a good rises from rs5 per unit to rs 6 per unit its demand falls from 20 units to 10 units calculate elasticity of demand​

Answer 1

Explanation:

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Given, P=Rs.20; P1=Rs.23;

△P=P1−P=Rs.23−Rs.20=Rs.3

Percentage change in price =P△P×100=203×=15 per cent

Percentage change in quantity demanded =(−)30 per cent

Price elasticity of demand (Ed)=(−)PercentagechangeinpricePercentagechangein quantitydemanded

=(−)15%−30% = 2

Price elasticty of demand =2.

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