Question

If the price of an apple increases from P20.00 to P25.00 and the amount you buy fails from 20 to 16 apple then your electricity of demand would be?

Answer 1

$Price elasticity of demand =\frac{ percentage change in Quantity}{percentage change in price}$

$Percentage change in price = 25-20= 5$

$= \frac{5}{20}×100= 25$%

$Percentage change in Quantity = 16-20= -4$ $= \frac{-4}{16}×100= -25$

$Price elasticity of demand = \frac{-25}{25}$$= -1$