Question

Calculate elasticity of demand on the basis of the following data:

Price (Rs.)	Quantity (kg)
6	10
4	15

Answer 1

Elasticity of Demand = `(ΔQ)/(ΔP)xxP/Q`

Where, ΔQ = Change in demand

ΔP = Change in price

P = Actual price

Q = Actual Quality

So, E_d = `(ΔQ)/(ΔP)xxP/Q`

= `5/-2xx6/10`

= 1.5

Since, E_d > 1, the demand is relatively elastic.