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Price elasticity of demand is concerned with the change in demand due to change in price of a product.there are several ways to calculate price elasticity. Lets take a example of percentage method.
We have a product x ,
price=25 rs per piece ,demand=30 pieces daily
if we increase the price of x then,price= 20 rs per piece
and demend=40 pieces daily p=5/25*100=20% elasticity= percentage change in demand percentage change in price d=10/30*100=33.3%
=20/33.3=0.6 ans price elasticity is always negative because price decreases ok that"s point.
We have a product x ,
price=25 rs per piece ,demand=30 pieces daily
if we increase the price of x then,price= 20 rs per piece
and demend=40 pieces daily p=5/25*100=20% elasticity= percentage change in demand percentage change in price d=10/30*100=33.3%
=20/33.3=0.6 ans price elasticity is always negative because price decreases ok that"s point.
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