When price is ₹ per unit, demand for a commodity is 100 units. As the price falls to ₹ 8 per unit , demand expands to 150 units. Calculate elasticicty of demands.

Answer

`E_(d)=(-)2.5` (Demand is Highly elastic as `E_(d) gt 1)`
Negatice sign of `E_(d)` indicates the inverse relationship between price and quantity demanded.

Explanation

price Elasticity of demand `(E_(d))=(DeltaQ)/(DeltaP)xx P/Qxx50/(-2)xx 10/100=(-)2.5`