question_answer

From the following data calculate price elasticity of demand
Price (Rs.)	Demand (units)
9	100
9	150

Answer:

Given,

Initial Price, P = 9

Initial Quantity demanded, Q = 100

Final Price,\[{{P}_{1}}\] = 9

Final Quantity demanded,\[{{Q}_{1}}\] = 150

\[\Delta P=(~-P)=(9-9)=0\] and,

\[\Delta Q=(Q)=(150100)=50\]

Now,     \[{{E}_{d}}=\frac{\Delta Q}{\Delta P}\times \frac{P}{Q}\]

Substituting the values,

\[{{E}_{d}}=\frac{50}{0}\times \frac{9}{100}=\infty \]

Hence, demand is Perfectly Elastic.