A) 2.4
B) - 2
C) - 2.4
D) 2
Correct Answer: C
Solution :
Point Elasticity of Demand (PED) = % change in quantity /% change in price If Q 1 and Q 2 are the initial and final quantities and P1 and P2 are the initial and final prices, \[PED=\frac{\frac{Q2-Q1}{Q1}\times 100}{\frac{(P2-P1)}{P1}\times 10}\] As per the question, Q 1 =1000. Q2 = 1400; PI = 12, P2 = 10. Using these values in the above formula, we get PED = -2.4
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