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Price elasticity of demand

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Suppose the price of apples rises from $3 a pound to $3.50 and your consumption of apples drops from 35 pounds of apples a month to 20 pounds of apples. What would your price elasticity of demand of apples be. What can you say about your price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic?

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Solution describes the steps and formula for calculating price elasticity of demand.

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Please refer attached file for complete solution. Formula typed with the help of equation writer is missing here.

Solution:

Q1=35 Q2=20
P1=3 P2=3.5

Ep = ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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