ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -The price elasticity of demand is reached by dividing the percentage change in the quantity demanded of a commodity by the percentage change in the price of the same product.
Detailed explanation-2: -Price elasticity formula: Ed = percentage change in Qd / percentage change in Price. If the percentage change is not given in a problem, it can be computed using the following formula: Percentage change in Qd = (Q1-Q2) / [1/2 (Q1+Q2)] where Q1 = initial Qd, and Q2 = new Qd.
Detailed explanation-3: -The price elasticity of demand is calculated as the percentage change in quantity divided by the percentage change in price.
Detailed explanation-4: -The price elasticity of demand (which is often shortened to demand elasticity) is defined to be the percentage change in quantity demanded, q, divided by the percentage change in price, p. The formula for the demand elasticity (ǫ) is: ǫ = p q dq dp .
Detailed explanation-5: -Elasticity of demand, measured by comparing the ratio of percentage change in the quantity demanded to the percentage change in the price of a commodity, is known as percentage method. It is one of the methods of measuring the elasticity of demand.