Calculate price elasticity of demand :
| Price of X= P | Quantity of X=Q |
| Old price $P_1=5$ | Old Quantity $Q_1=15$ |
| New price $P_2=7$ | New Quantity $Q_2=12$ |
Answer & explanation
Correct answer: option 3
The correct answer is option (3) : (-) 0.5
$P_1=5,P_2=7$
$Q_1=15,Q_2=12$
$e_D=(\frac{ΔQ}{ΔP})×(\frac{P_1}{Q_1})$
$=\frac{(Q_2-Q_1)}{(P_2-P_1)}×(\frac{5}{15})$
$=\frac{(12-15)}{(7-5)}×(\frac{1}{3})$
$=\frac{-3}{+2}×(\frac{1}{3})=-\frac{1}{2}$
$e_D=-0.5$