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Price Elasticity of Supply

Calculate the...

Question

Calculate the price elasticity of demand for a commodity when its price increases by 25 % and quantity demanded falls from 150 units to 120 units.

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Solution

$E_{d} = \frac{percentage change in demand}{percentage change in price}$

$= \frac{\frac{- 30}{150} \times 100}{25}$

$= - 0.8$

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