Answer:
Price elasticity of demand = 0.67
Explanation:
Given the following data;
Percentage change in price = 4%
Percentage change in demand = 6%
To find the price elasticity of demand;
A price elasticity of demand can be defined as a measure of the responsiveness of the quantity of a product demanded with respect to a change in price of the product, all things being equal.
Mathematically, the price elasticity of demand is given by the formula;
[tex] Price \; elasticity \; of \; demand = \frac {Percentage \; change \; in \; price}{Percentage \; change \; in \; demand} [/tex]
Substituting into the equation, we have;
[tex] Price \; elasticity \; of \; demand = \frac {4}{6} [/tex]
Price elasticity of demand = 0.67
