as the price of a commodity rises from 10 to 12,its demand falls from 100 units to 50 units.calculate elasticity of demand.
a).4 b).3
c).1 d).2
4 Replies
AKSHIT MALHOTRA
(C.A Final Student)
(1337 Points)
Replied 08 March 2012
A IS THE ANSWER.
% CHANGE IN QTY/% CHANGE IN PRICE.
=20/50 =0.4
rajesh
(Asst Manager)
(71 Points)
Replied 08 March 2012
The Price Elasticity of Demand (commonly known as just price elasticity) measures the rate of response of quantity demanded due to a price change. The formula for the Price Elasticity of Demand (PEoD) is:
PEoD = (% Change in Quantity Demanded)/(% Change in Price)
The answer to the question you have given is 2.5.
The Price elasticity shows that demand is Price Elastic (sensitive to price changes).
AKSHIT MALHOTRA
(C.A Final Student)
(1337 Points)
Replied 08 March 2012
sorry yr
i wasn't in touch
u r right
Ben Mote
(Manager)
(22 Points)
Replied 17 January 2018
As we know that in today’s world everything is so expensive that are not affordable for the rich as well as poor’s. We can see on essay writing the price of everything whether they are cheap or not.
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