Explain the measurement of price elasticity of demand with the help of percentage method
Dear Student,
According to the percentage method, the elasticity of demand(Ed) can be calculated by dividing the percentage change in quantity demanded of a good by the percentage change in its price. It can be expressed as:
If the percentage change in demand is proportional to the percentage change in price, the elasticity is said to be unity. If the percentage change in demand is more than the percentage change in price, the elasticity is more than one, and if the percentage change in demand is less than the percentage change in price, the elasticity of demand is less than unity.
Regards
According to the percentage method, the elasticity of demand(Ed) can be calculated by dividing the percentage change in quantity demanded of a good by the percentage change in its price. It can be expressed as:
If the percentage change in demand is proportional to the percentage change in price, the elasticity is said to be unity. If the percentage change in demand is more than the percentage change in price, the elasticity is more than one, and if the percentage change in demand is less than the percentage change in price, the elasticity of demand is less than unity.
Regards