Showing posts with label Proportionate method. Show all posts
Showing posts with label Proportionate method. Show all posts

Percentage or Proportionate method For calculating Price Elasticity

Price elasticity of demand is measured by the ratio of percentage change in quantity demanded to percentage change in price of the commodity.

As explained below :
price elasticity
price elasticity

Mathematically speaking, price elasticity of demand is a negative number because of the negative slope of the demand curve, the price and the quantity change in the opposite directions from each other.