if the quanity demanded of soda decreases by 5 percent when the price of soda rises by 100 percent what is the price elasticity

Question

liraira [26]

3 years ago

9

if the quanity demanded of soda decreases by 5 percent when the price of soda rises by 100 percent what is the price elasticity

of demand for soda

Mathematics

1 answer:

vodomira [7] · Answer 1 · 2021-12-26T21:09:37+03:00

Price elasticity of demand is calculated as the ratio of change in demand to the ratio of change in price. So if the demand changes -5% when the price changes 100%, the PED = -5% / 100% = -0.05. Most good have a PED < 0, since demand typically decreases when the price is increased.