when the price of good is RS4 the demand for the good is 25 units if the price increses to RS5 the demand falls to 15 units claculate the price elasticity

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21-02-2021
Business

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when the price of good is RS4 the demand for the good is 25 units if the price increses to RS5 the demand falls to 15 units claculate the price elasticity

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kirabowen15 kirabowen15 · Answer 1 · 2021-02-21T20:40:48+01:00

kirabowen15 kirabowen15

21-02-2021

Price Elasticity = % Change in quantity demanded / % Change in Price

Original demand - New demand =
25 - 15 = 10

10/ 25 = 0.4%

Original price - New price =
4 - 5 = -1

-1/4 = -0.25%

0.4%/-0.25%
= -1.6

Price Elasticity = -1.6 %

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