the demand fxn of good-x is Qx = 20-2px... Calculate PeD of demand when price falls from 5 to 3 ??
initial demand =20-2x5=10 new demand =20-2x3=14
inital price=5 new price =3
Ed. = Percentage change in quantity demanded/ Percentage change in price
Ed. = P/q X ∆q/∆p
P = Original price
Q = Original quantity
∆ = Change
change in quantity =new -initial quantity =14-10=4
change in price =new -initial =3-5=-2
Ed =(-) 4/10 x 5 /-2 = 1 ans