Question

The price elasticity is 2. The percentage change in price is equal to 5. Find the percentage change in quantity.

Answer 1

Elasticity Coefficient = 2

% Change in Price = 5%

% Change in Quantity = Let this be X

Elasticity = `("% Change in Quantity")/("% Change in Price")`

2 = `X/5%`

X = 2 × 5%

= 10%

The percentage change in quantity is 10%.