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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA BT – FIA FBT › Exam kit
Question:
The current selling price of X has raised from $1 to $1.50, annual demand will drop from 100,000 units to 90,000 units.
The price elasticity of demand is mentioned as 0.2 in solution.
Please explain how 0.2 is the asnwer.
Proportional rise in price = 50%
Proportional fall in volume = 10%
10/50 = 0.2
