as the prie of a ommodity 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
intermediate(ipc)course (no) (1460 Points)
08 March 2012as the prie of a ommodity 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
CA Priya
(CS Final)
(1049 Points)
Replied 08 March 2012
Elasticity of demand = (% change in Demand / % change in price)
Here % change in Demand = (50-100/100)*100 = -50%
% change in Price = (12-10/10)*100 = 20%
EOD = 50% / 20% = -2.5
So i think the correct answer is not provided in the options..........
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