Answer:
The question is incomplete; Calculate the price elasticity of demand
The answer is -2 showing that the Price Elasticity of Demand for the good in question is highly elastic.
Explanation:
Price Elasticity of Demand = percent change in quantity / percent change in price
percent change in quantity = {Q
2
−
Q
1
/ [(
Q
2
+
Q
1
)
÷
2]}
×
100
percent change in price = {P
2
− P1
/ [(
P
2
+ P1
)
÷
2]}
×
100
percent change in quantity= {25
−
20/ [(25
+20)
÷
2]}
×
100= 22.2%
percent change in price = {8-10 / [(
8+10)
÷
2]}
×
100 = -11.11%
Price Elasticity of Demand = 22.2% / -11.11%= <u>-2</u>
