THE DEMAND FOR DOUBLES DUE TO 25% FALL IN PRICE.CALCULATE ITS PRICE ELASTICITY OF DEMAND. PLZZZ ANSWER AS SOON AS POSSIBLE.
demand doubles = 100 % change in demand
(if initial quantity demanded = x then new quantity = 2x
% change in demand = Δ Q / Q * 100 = x / x * 100
= 100 % )
% change in price = 25 %
elasticity of demand = % change in demand / % change in price
= 100 / 25
elasticity of demand = 4
therefore more elsatic demand