Suppose an individual buy 30 bananas when its price is Rs. 10 per banana. When the price increases to Rs. 14 per banana, she reduces her demand to 24 bananas. In this case, what will be the price elasticity of demand?

0.5

The correct answer is Option (3) → 0.5

PED= |%Change in Quantity / %Change in Price|

%Change in Quantity=[ (New Quantity−Old Quantity​)/ Old Quantity] * 100

                                   = [(24-30)/30] *100

                                   = [- 6/30]*100 

                                   = - 20 %

Calculate % change in price = [(New Price−Old Price​)/ Old Price] * 100

                                               = [(14-10)/10] * 100

                                               = 40% 

PED= |-20/40| =0.5