If the quantity demanded of soda decreases by 24 percent whe

If the quantity demanded of soda decreases by 24 percent when the price of soda rises by 20 percent, what is the price elasticity of demand for soda?

Solution

Solution :

Price elasticity of demand = % change in quantity demanded / % change in price

Price elasticity of demand = 24/20

Price elasticity of demand =1.2

The demand is elastic .