Answer:
Price elasticity of demand = 1
Step-by-step explanation:
Old quantity demanded = 200
New quantity demanded = 150
Old price = 8
New price = 10
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
percentage change in quantity demanded = change in quantity demand / old demand × 100
= 50/200 × 100
= 0.25 × 100
= 25%
percentage change in price = change in price / old price × 100
= 2/8 × 100
= 0.25 × 100
= 25%
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
= 25% / 25%
= 1
Price elasticity of demand = 1
