The demand funcation of Commodity 'X' is given as : `Q_(x)= 20 - 2P_(x)`. Calculate its price elasticity of demand when price falls from ₹ 5 to ₹3.

Answer

`E_(d) = (-) 1` ( Demand is unitary elastic as `E_(d)=1`)

Explanation

Given : `Q_(x)=20 -2P_(x)`
Demand at Price of `₹5= 20 -2xx 5 = 10 units`
Demand at price of `₹3=20-2xx 3= 14 units`
Price Elasticity of Demand `(E_(d)) = (DeltaQ)/(DeltaP)xx P/Q= 4/(-2) xx 5/10 = (-) 1`