Can you explain the answer of this question below:

The price of a commodity were increased form Rs. 4 to Rs. 6. As a result demand decreased form 15 units to 10 units. What is the price elasticity? (Point elasticity)

- A:0.66
- B:0.33
- C:1.00
- D:1.5

The answer is a.

Related Test: Test: Theory Of Demand- 1

By
Adarsh Jha
·
Jun 09, 2018 ·CA Foundation

6 Answers

Harisvak1755@gmail.com H
answered
Jun 09, 2018

The formulae was change in qd\change in priceÃ—price/qd therefore change in price={6-4=2},change in qd={15-10=5,}price=4,qd=15

Bharat Tulsiani
answered
Jun 09, 2018

Change in quantity is 33.333% and in price is 50% so it is 0..666

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