If the price of a bicycle changes from N120 to N80 and quantity bought changes from 300 to 500 units, the elasticity of demand for bicycle is
- 66.7
- 0.5
- 1.5
-
2.0
The correct answer is: D
Explanation
change in price = 120- 80 = 40
change in quantity = 500 - 300 = 200
% change = 40/100 = 0.4
200/100 = 2
0.4/2 = 0.2