Question

If the price of a product decreases by 5% and the quantity demanded increases from 115 to 120, what is the price elasticity of demand for this product?

Answer 1

Price Elasticity =$\frac{\Delta Q}{\Delta P}×100$

=115$-$120=$-5$

$\frac{-5}{115}×100$ =$-4.3$ =Quantity Demanded

Price Elasticity =$\frac{-4.3}{5}$ =$-0.86$