Answer to Question #25949 in Microeconomics for Kleopas christian

Question

if quantity demanded rises by 80% s price falls by 40%,the elasticity of demand equals ............
(a) 2,0
(b) 0,5
(c) 1,0
(d) 40,0

Answer 1

if quantity demanded rises by 80% s price falls by 40%,the elasticity of
demand equals ............
(a) 2,0


& Price elasticity of demand (PED or Ed) is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price. More precisely, it gives the percentage change in quantity demanded in response to a one percent change in price (ceteris paribus, i.e. holding constant all the other determinants of demand, such as income). It was devised by Alfred Marshall.
Price elasticity of demand = |change in quantity demanded/change in price| = |80%/-40%| = 2, so the demand is elastic.