Solution:
Price elasticity of demand (PEd) = =%changeinprice%changeinquantitydemanded
Q1 = 18800 Q2 = 21200
P1 = 1 P2 = 0.50
PED = =(Q2+Q1)/2Q2−Q1÷(P2+P1)/2P2−P1
PED = (21200+18800)/221200−18800÷(21200+18800)/221200−18800
PED =200002400÷0.75−0.5=−0.670.12=−0.18
The price elasticity of demand = -0.18
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