Question

When the price of good X increased from Rs.600 to Rs.650, its demand decreased from 200 units to 188 units. What is its price elasticity of demand?​

Answer 1

Answer:

600-650=50 then 200-188=12

elasticity of demand=percentage

change in a price / change in a unit

demang = 50/12 = 4.1

Explanation:

hope it's helpful

Answer 2

The correct answer is 0.72. The Elasticity of Demand is 0.72.

Let's see the calculation that is involved and know how the value 0.72 has arrived:

• The formula for price elasticity of demand is the Percentage Change in the Quality of Demand divided by the Percentage Change in the Price multiplied by the Original Price divided by Old Demand.
• Original Price is Rs.600, New Price is Rs.650 and Original Demand is 200units, New Demand is 188units.
• The change in Price is Rs.50, and the change in Demand is 12units.
• (12/50)*(600/200) is 0.72.