if the quality demanded of peanuts decreases by 2 percent wh

if the quality demanded of peanuts decreases by 2 percent when the price of peanuts rises by 4 percent what is the price elasticity of demand for peanuts?

Solution

price elasticity of demand for peanuts=change in quality demanded of peanuts / change in price of peanuts

= -2% / 4% = -0.50 , for elasticity purposes negative sign can be ignored