Question

An individual spends all his income on two goods X and Y. If with the rise in price of good X, the quantity purchased of good Y remains unchanged, what is the price elasticity of demand for X?

Answer 1

$PED=(∆Q÷∆P)×(P÷Q)$

$∆Q=x2-x1$

$∆P=P2-P1$

$PED=(x2-x1)÷(P2-P1)×(P÷Q)$