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Price Elasticity of Demand (Percentage Method)
1.
2. A company faces a -2.5 price
elasticity of demand for its product. It
is presently selling 10,000
units/month. If it wants to increase
quantity sold by 6%, it must lower its
price
Options:
1) 3.50% 2) 15%
3) 2.50% 4) 2.40%
3. Percentage Method Of Calculating Price Elasticity Of Demand
Formula
% Change in Quantity Demanded
ED = -----------------------------------------------------------------------------
% Change in Price
6
2.5= -------------
x
6
x = ----------
2.5
= 2.40 %