Question

The price of a commodity decreases from Rs. $6$ to Rs. $4$ and his demand for goods increases from $10$ units to $15$ units. Find the coefficient of price elasticity.

• A. $1.5$
• B. $2.5$
• C. $-1.5$
• D. $0.5$

Answer 1

Answer: (C)

$-1.5$

$Ep=-\frac{\Delta Q}{\Delta P}\times \frac{P}{Q}$
$=\frac{(10-15)}{(6-4)}\times \frac{6}{10}=-1.5$
Under Arc method answer is $-1$ and $-1$ is not in option. So Arc method not apply here.