economics query

kumar shan (student) (138 Points)

16 November 2009  

i want to know whether the answer for the price elasticty of demand question is correct or not. please tell me how

in econoville, there is one grocery shop. it used to sell fresh milk  at rs.20 per litre , at which price 400 litres  of milk  were sold per month . after some time , the price were raised to rs. 30per  litre.

only 200 lts of milk is sold

the price elasticty of demand when fresh milk price increases from rs.20 to rs.30 is equal to a)2.5 b)1.0 c)1.66 d)2.66

correct answer is  1.66