Question

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

Answer 1

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 %