When the price rises from Rs 5 to Rs 6, quantity demanded falls from 60 to 48 units. What is the price elasticity of demand (in absolute value)?
Answer and explanation
Correct answer: A. 1
- Step 1: Percentage change in price = 20% and in quantity = -20%.
- Step 2: Elasticity = 20 / 20 = 1.
Answer
1.
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