Question

if the price of good increases from the £10to £12 and at the same time the quantity demanded falls from 100units to 90 units the price of elasticity will be​

Answer 1

Answer: -0.5

Step-by-step explanation:

The price elasticity of demand is calculated as :

= % change in quantity demanded / % change in price.

% change in quantity demanded = (90 - 100) / 100 × 100 = -10%

% change in price = (12 - 10) / 10 × 100 = 2/10 × 100 = 20%

Price elasticity of demand = -10% / 20% = -0.5