Question

When the price falls from 6 to 4, the demand rises from 10 to 15
units. Calculate price elasticity of demand.
(Point elasticity)
(a) 1.5
(b) 3.5
(c) 0.5
(d) 2.​

Answer 1

Answer:

P=6

∆P=2

Q=10

∆Q=5

by proportionate method,

elasticity of demand= ∆Q/∆P×P/Q

=5/2×6/10

=30/20= 3/2

=1.5 ans

so, the correct option is (a)

Explanation:

P= initial price

∆P=change in price

Q= initial quantity demanded

∆Q= change in quantity demanded