Question

when the price of a good rises from Rs 20 per unit to Rs 23 per unit its demand falls by 30 percent calculate price elasticity of demand.​

Answer 1

Answer:

Given, P=Rs.20; P

1

=Rs.23;

△P=P

1

−P=Rs.23−Rs.20=Rs.3

Percentage change in price =

P

△P

×100=

20

3

×=15 per cent

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

Price elasticity of demand (E

d

)=(−)

Percentagechangeinprice

Percentagechangein quantitydemanded

=(−)

15%

−30%

= 2