Find price elasticity of good a and b

Dear Student
​​​​​​Initial ​QD of A = 20/4 = 5
Final QD of A = 15/5 =3
​​​​​​Initial ​QD of B = 15/3 = 5
Final QD of B = 4/4 = 1​​​​
$Price Elasticity = \frac{\%ge change in Quantity demanded}{\%ge change in Price}$

$$\begin{gathered} \%ge change in QD of A = Q{D}_1 - Q{D}_{0 } / Q{D}_0 * 100 \\ \%ge change in QD of A =3-5/ 5 * 100 \\ \%ge change in QD of A = -40\% \\ \%ge change in Price of A = P1 - P_{0 } / P_0 * 100 \\ \%ge change in Price of A =5-4 / 4 * 100 \\ \%ge change in Price of A = 25\% \\ \%ge change in QD of B = Q{D}_1 - Q{D}_{0 } / Q{D}_0 * 100 \\ \%ge change in QD of B =1-5/5 * 100 \\ \%ge change in QD of B = -80\% \\ \%ge change in Price of B = P1 - P_{0 } / P_0 * 100 \\ \%ge change in Price of B =4-3 / 3 * 100 \\ \%ge change in Price of B = 33\% \end{gathered}$$



$$\begin{gathered} Price Elasticity of A = \frac{-40}{25} = -1.6 \\ Price Elasticity of B = \frac{-80}{33.33} = -2.4 \end{gathered}$$


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This implies the price elasticity of B is more inelastic then A.

Regards