When the price of a good is * 20/unit, the quantity demanded is 150 units. If
the price of good rises to * 30/unit, the quantity demanded falls to 120 units.
Calculate the price elasticity of demand.
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The price elasticity of demand is calculated as the percentage change in quantity divided by the percentage change in price. Therefore, the elasticity of demand between these two points is 6.9%−15.4% which is 0.45, an amount smaller than one, showing that the demand is inelastic in this interval.
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