IF THE QUANTITY DEMANDED OF A COMMODITY INCREASES FROM 20 UNITS TO 30 UNITS WHEN THERE IS AN INCREASE IN PRICE FROM 4.00 DOLLARS TO 5.00 DOLLARS, THE ELASTICITY OF DEMAND IS
January 12, 2024
The elasticity of demand is a measure of the responsiveness of the quantity demanded of a commodity to a change in its price. It is calculated using the following formula:
Elasticity of Demand = Percentage Change in Quantity Demanded / Percentage Change in Price
In this case, the quantity demanded increases from 20 units to 30 units when the price increases from $4.00 to $5.00. To determine the elasticity of demand, we need to calculate the percentage change in both the quantity demanded and the price.