Question

When the price of chicken increases from Rs.300 to Rs.400 per kg in a certain market the
daily demand for meat went up from 50 to 70. Compute Elasticity of demand and comment on
the result

Answer 1

Answer:

p=300,p1=400,Q=50,Q1=70.

∆P=P1-P,400-300=100.

∆Q=Q1-Q=70-50=20.

• Ed=(-)P/Q×∆Q/∆P.
• (-)300/50×20/100=1.2

Ed= -1.2(Greater then unity 1).